U.S. Code » Title 15 » Chapter CHAPTER 98— PUBLIC COMPANY ACCOUNTING REFORM AND CORPORATE RESPONSIBILITY › Subchapter SUBCHAPTER III— CORPORATE RESPONSIBILITY

15 U.S.C. § 7243

Forfeiture of certain bonuses and profits

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(a) Additional compensation prior to noncompliance with Commission financial reporting requirementsIf an issuer is required to prepare an accounting restatement due to the material noncompliance of the issuer, as a result of misconduct, with any financial reporting requirement under the securities laws, the chief executive officer and chief financial officer of the issuer shall reimburse the issuer for—(1) any bonus or other incentive-based or equity-based compensation received by that person from the issuer during the 12-month period following the first public issuance or filing with the Commission (whichever first occurs) of the financial document embodying such financial reporting requirement; and(2) any profits realized from the sale of securities of the issuer during that 12-month period.(b) Commission exemption authority

The Commission may exempt any person from the application of subsection (a), as it deems necessary and appropriate.

(Pub. L. 107–204, title III, § 304, July 30, 2002, 116 Stat. 778.)
Notes of Decisions
Cited in 42 cases (5 in the last 5 years), 2004–2023 · leading case: In Re Digimarc Corp. Derivative Litig., 549 F.3d 1223 (9th Cir. 2008).
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In Re Digimarc Corp. Derivative Litig., 549 F.3d 1223 (9th Cir. 2008). · cites it 6× “Diaz alleges that the individual defendants, who are current and former officers and directors of Digimarc, breached their fiduciary duties to the corporation and its shareholders by issuing misleading financial statements and misrepresenting the business and prospects of…”
U.S. Sec. & Exch. Comm'n v. Jensen, 835 F.3d 1100 (9th Cir. 2016). · cites it 6× “15 U.S.C. § 7243 (a). The district court held that Jensen and Tekulve did not violate SOX 304 because “Basin’s 26 U.”
Sec. & Exch. Comm'n v. Life Partners Holdings, Inc., 854 F.3d 765 (5th Cir. 2017). · cites it 3× “Finally, the SEC asked that Pardo be ordered to reimburse LPHI for certain compensation and trading profits under section 304(a) of the Sarbanes-Oxley Act of 2002 (SOX), 15 U.S.C. § 7243 (a). At trial, Larry Rubin, the SEC’s expert witness, testified that LPHI’s LEs were…”
Cohen v. Viray Ex Rel. DHB Indus., Inc., 622 F.3d 188 (2d Cir. 2010). · cites it 8× “against a number of its former officers and directors because the settlement agreement impermissibly releases and indemnifies DHB’s former Chief Executive Officer and Chief Financial Officer against all liability arising under § 304 of the Sarbanes-Oxley Act, 15 U.S.C. § 7243 .…”
Sec. & Exch. Comm'n v. Jenkins, 718 F. Supp. 2d 1070 (D. Ariz. 2010). · cites it 7× “The SEC now seeks an order compelling Jenkins to reimburse CSK for this income pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley” or the “Act”), 15 U.S.C. § 7243 (2006). Section 304 of the Act requires that, if an issuer, such as CSK, must prepare an…”
Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Raines, 534 F.3d 779 (D.C. Cir. 2008). · cites it 2× “15 U.S.C. § 7243 (a). That statutory provision establishes that the SEC may sue the CEO and CFO of a company when the company has been required to restate its earnings due to noncompliance with securities laws.”
Sec. & Exch. Comm'n v. Jasper, 678 F.3d 1116 (9th Cir. 2012). · cites it 2× “The court also ordered, pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (“SOX 304”), codified at 15 U.S.C. § 7243 , that Jasper reimburse Maxim for about $1.”
In Re Qwest Commc'ns Int'l, Inc. Sec. Litig., 387 F. Supp. 2d 1130 (D. Colo. 2005). · cites it 3× “(CGMHI) under under Section 20(a) of the 1934 Act; 8) A claim against individual defendants Joe Nacchio and Robin Szeliga under § 304 of the Sarbanes-Oxley Act, 15 U.S.C. § 7243 ; 9) A claim against all defendants under the Colorado Securities Act, §§ 11 — 51— 501 & 604, C.”
S.S. Body Armor I., Inc. v. Carter Ledyard & Milburn LLP, 927 F.3d 763 (3rd Cir. 2019). “slew of class action and derivative lawsuits consolidated in the United States District Court for the Eastern District of New York ("EDNY"), Debtor proposed a global settlement agreement ("First Settlement Agreement") worth approximately $ 48 million and that, among other…”
Kogan Ex Rel. Ligand Pharm. Inc. v. Robinson, 432 F. Supp. 2d 1075 (S.D. Cal. 2006). · cites it 3× “15 U.S.C. § 7243 . Plaintiff initially argues Section 304 expressly creates a private right of action in favor of issuers to seek reimbursement from top officers of certain bonuses and profits.”
In Re Cree, Inc. Sec. Litig., 333 F. Supp. 2d 461 (M.D.N.C. 2004). · cites it 2× “10b-5, and Section 304 of the Sarbanes-Oxley Act of 2002, 15 U.S.C. § 7243 . Before the court is Defendants’ motion to dismiss the complaint as untimely and deficient under the heightened pleading requirements of the Private Securities Litigation Reform Act of 1995, 15 U.”
United States Sec. & Exch. Comm'n v. Geswein, 2 F. Supp. 3d 1074 (N.D. Ohio 2014). · cites it 2× “The Ninth Count alleges Geswein and Kra-kora failed to make the required reimbursement in violation of Section 304 of the Sarbanes-Oxley Act of 2002 [ 15 U.S.C. § 7243 ]. In its Prayer for Relief, the SEC seeks an order permanently enjoining all Defendants from violating the…”
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