Munger Tolles Seeks to Dismiss $4 Million SEC 'Clawback' Suit Against Ex-CEO
November 10, 2009
Last summer, when the Securities and Exchange Commission sued former CSK Auto CEO Maynard Jenkins to recover $4 million he earned between 2002 and 2004, the agency made history: It was the first time the SEC had brought an enforcement action solely under the clawback provision of Sarbanes-Oxley. The suit didn't charge Jenkins with any wrongdoing; the SEC was simply trying to recoup the bonus and stock compensation Jenkins received during the period for which the company had to restate earnings allegedly because of fraud committed by others. The case surely made more than a few CEOs grab their wallets, but Jenkins' lawyers at Munger, Tolles & Olson are trying to allay fears in a just-filed motion seeking to dismiss the action.
The Munger Tolles team, led by John Spiegel, argues that the SEC's suit is not allowed either under the clawback provision of Sarbanes Oxley or the Constitution, mainly because Jenkins was not accused of any wrongdoing.