Look for an emboldened Securities & Exchange Commission to file new "clawback" civil suits against CEOs and CFOs who were on board during a period in which their companies engaged in financial reporting shenanigans- even if they themselves knew nothing about the misdeeds. At a Senate Banking Committee hearing in mid-November, SEC Director of Enforcement Robert Khuzami said that there are likely to be other cases similar to the recently completed case where Maynard Jenkins, former CEO of CSK Auto Corporation, returned $2.8 million in stock profits as part of a clawback settlement. Jenkins had been resisting a settlement. At the hearings, Khuzami told Sen. Jack Reed (D.-R.L), chair of the Subcommittee on Securities, Insurance, and Investment, that Section 304 of the Sarbanes-Oxley Act is "a strong tool" but "not without some issues."
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