The D&O Diary’s Kevin LaCroix notes that yet another federal district court has affirmed the SEC’s authority under SOX section 304 to claw back bonuses and stock sale proceeds from CEOs and CFOs who have not personally been alleged to have engaged in any wrongdoing in connection with their company’s financial restatements. He also highlights the implications this has for the Dodd Frank Act clawback provision and the soon-to-be-forthcoming rules under same:

The question of the SEC’s clawback authority has even broader implications in the wake of the enactment of the Dodd-Frank Act, which makes a much broader range of corporate officials potentially subject to clawback liability…. [U]nder Section 954 of the Dodd-Frank Act, the national securities exchanges are required to promulgate rules requiring reporting companies to adopt and disclose procedures providing for the recovery of any amount of incentive based compensation paid to any current or former executive that exceeds the amount which would have been paid under an accounting restatement in the three years prior to the date on which the company was required to prepare the restatement. The Dodd-Frank provision is quite a bit broader than Sox Section 304, as it extends to all executives and it reaches back three years and to all incentive based compensation.