Wednesday, November 16, 2011

Former CEO to Return $2.8 Million in Bonuses and Stock Profits Received During CSK Auto Accounting Fraud

The SEC announced that the former chief executive officer and chairman of CSK Auto Corporation has agreed to return $2.8 million in bonus compensation and stock profits that he received while the company was committing accounting fraud.

The former executive officer was not personally charged by the SEC for the company’s misconduct, however he is still required under Section 304 of the Sarbanes-Oxley Act (SOX) to reimburse CSK Auto for incentive-based compensation and stock sale profits that he received during the company’s fraudulent period. This marked the agency’s first SOX clawback case against an individual who was not alleged to have otherwise violated the securities laws.

Robert Khuzami, Director of the SEC's Division of Enforcement said, "CEOs should know that they can be deprived of bonuses or stock profits they received while accounting fraud was occurring on their watch."

Rosalind Tyson, Director of the SEC’s Los Angeles Regional Office, added, “[He] received incentive-based pay while CSK Auto was fraudulently overstating its income to shareholders. His bonuses and stock profits are now being rightfully returned to the company for the benefit of the shareholders."


Former CEO to Return $2.8 Million in Bonuses and Stock Profits Received During CSK Auto Accounting Fraud

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