About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

64 Bus. Law. [i] (2008-2009)

handle is hein.journals/busl64 and id is 1 raw text is: Contents ARTICLES The Clawback Provision of Sarbanes-Oxley: An Underutilized Incentive to Keep the Corporate House Clean Rachael E. Schwartz The Sarbanes-Oxley Act of 2002, passed in the wake of corporate scan- dals involving misstated financial reports, included a provision for cer- tain compensation and profits from the sale of company stock to be clawed back from chief executive officers and chief financial officers of companies that are required to restate their financials, due to material non- compliance with any financial reporting requirement of the securities laws as a result of misconduct. Courts have determined that only the Securities and Exchange Commission may sue to enforce this clawback provision. In the six years following passage of the law, there have been Sarbanes- Oxley clawbacks in only a small number of cases, each one an options backdating case involving allegations that the officer affected personally committed fraud. This Article takes the position that the clawback provision has no scienter requirement and its application should not be limited to officers who have personally engaged in misconduct. Rather, the wording of Sarbanes-Oxley, its legislative history, and the policies it serves call for the clawback to be applied to the chief executive officers and chief financial officers of companies that are required to restate their financials due to material non-compliance with any financial reporting requirement of the securities laws as a result of misconduct, regardless of whether those officers actively participated in the wrongdoing, knew of and failed to correct the wrongdoing, or were oblivious to wrongdoing by employees subject to their control. This general rule can be made subject to an exemption for circumstances involving certain misconduct by non-management employees. 37 RULLCA Section 301-The Fortunate Consequences (and Continuing Questions) of Distinguishing Apparent Agency and Decisional Authority Thomas E. Rutledge and Steven G. Frost The Revised Uniform Limited Liability Company Act (RULLCA), final- ized in 2006, adopts a unique formulation rejecting statutory apparent agency authority on behalf of the company. Further, in the member- managed limited liability company, it separates inter se decisional au- thority from the ability to bind the entity. We trace the history of this development in what is now the dominant form of business organiza- tion, explain the objectives and operation of section 301 of RULLCA

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most