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CALIFORNIA CORPORATE & SECURITIES LAW

SEC Clawback Proposal Overlooks Contract Law Fundamentals

In proposing the clawback rules for stock exchanges mandated by Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Securities and Exchange Commission evinces little regard for contrary provisions in existing contracts: Further, we do not view inconsistency between the proposed rule and rule amendments and existing compensation contracts,…

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The SEC’s Clawback Proposal – An Unconstitutional Taking?

In proposing incentive compensation clawback rules, the Securities and Exchange Commission studiously ignored any constitutional restraints on its actions.  Buried in the 198-page proposal is this chilling assertion: Issuer compliance would be required whether such incentive-based compensation is received pursuant to a pre-existing contract or arrangement, or one that is entered into after the effective…

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What The SEC Pretermitted In Proposing A Clawback Policy Rule

The Securities and Exchange Commission began the month by issuing proposed rules that would direct national securities exchanges and associations to establish listing standards requiring companies to adopt policies that require executive officers to pay back incentive-based compensation that was awarded erroneously.  Five years ago, Congress ordered the SEC to adopt these rules in Section 954 of the…

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Why The WSJ Is Wrong About SEC Rulemaking On Claw backs

As noted by Broc Romanek, The Wall Street Journal yesterday announced: The Securities and Exchange Commission will soon propose long-awaited rules forcing companies to claw back, or revoke, some of their top officials’ incentive pay if they have to restate the financial results that led to it, according to people familiar with the agency’s internal…

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