The Advisors' Blog

– Broc Romanek, CompensationStandards.com

Kevin LaCroix’s blog recently covered the latest court decision over a SEC clawback under Section 304 of Sarbanes-Oxley: SEC v. Baker and Gluk. Here is a note on the opinion from Brink Dickerson of Troutman Sanders:

Baker is a succinct, well-written opinion from a conservative District Court – the Western District of Texas in Austin. It involves the clawback of executive compensation under SOX 304 from executives who were not the cause the underlying restatement, and, like Jenkins in Arizona, the court rejects the defendants’ claims that there had to be misconduct on their part. As importantly, the court also rejects claims that Section 304 is unconstitutional and is barred by the Civil Asset Forfeiture Reform Act, arguments that the court in Jenkins did not reach. With there now being two solid decisions finding against the misconduct argument, I think that it is settled for good.

Speaking of clawbacks, check out this Paul Hodgson piece entitled “It is time for real bank clawbacks“…