The Securities and Exchange Commission is breaking new ground by trying to force the former CEO of a corrupt company to pay back $4.1 million in bonuses -- even though he had nothing to do with the corruption.
Maynard Jenkins, 66, who lives in Scottsdale and also has an address in Sedona, collected the bonuses during a period when -- according to the SEC -- other CSK execs were fraudulently inflating earnings. Nobody alleges Jenkins knew anything about the scam, but since the bonuses were based on the bogus earning reports, the SEC believes he should forfeit the money. Jenkins was the CEO and chairman of the board of CSK from 1997 to 2007, when he retired.
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The SEC has a colorful name for this kind of action: a clawback.
The SEC filed a lawsuit against him yesterday in the U.S. District Court in Arizona. See a copy of it by clicking here.
The case will get the attention of the business world, say experts in a Bloomberg News report, because it's the first time the SEC has used a clawback in this way. The law that allows the SEC to seize Jenkins' money has been around for years, but in the past, the agency ordered only alleged fraudsters to pay back similar bonuses. We tried to call Jenkins at his Sedona number, but got no answer.
If it was us, we'd probably have the money spent by now.