Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Wednesday, July 22, 2009

SEC Seeks Clawback from Former CEO of CSK Auto

The SEC asked the U.S. District Court for the District of Arizona to order the former chief executive officer of CSK Auto Corporation to reimburse the company and its shareholders more than $4 million that he received in bonuses and stock sale profits while CSK was committing accounting fraud.  The SEC's enforcement action charges Maynard L. Jenkins with violations of the Sarbanes-Oxley Act (SOX). It is the first action seeking reimbursement under the SOX "clawback" provision (Section 304) from an individual who is not alleged to have otherwise violated the securities laws. The SOX "clawback" provision deprives corporate executives of money that they earned while their companies were misleading investors.

According to the SEC's complaint, Jenkins made $2,091,020 in bonuses and $2,018,893 in company stock sales that should have been reimbursed to CSK pursuant to SOX Section 304.  While Jenkins served as CEO, CSK filed two such restatements related to its overstated vendor allowances.  The SEC's complaint does not allege that Jenkins engaged in the fraudulent conduct.

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