• Welcome to The Corporate Insider

    Welcome to The Corporate Insider, a website for workers, consumers, shareholders, academics and members of the press. This site is the internet's resource center for all who are impacted by corporate conduct.

    Recent history has demonstrated that wrongful conduct by corporate insiders can have a devastating impact on corporate stakeholders and observers. From securities fraud which adversely impacts the value of stock to short cuts in the manufacturing process that result in defective products being injected into the marketplace, corporate conduct can be devastating. Yet, it is not so much the conduct of the corporation itself that can be problematic as much as it is the conduct of the corporate insiders who, often times guided by their own self-interest, abuse their corporate mandate to the detriment of stakeholders. In addition to shareholders and consumers, workers lose out when basic wage and hour, benefit, and job safety laws are skirted. Insider wrongdoing has eroded the integrity of many publicly traded corporations, and layoffs and plant closings have caused rising unemployment and the destruction of local economies.

    Why do corporate insiders skirt the law and their obligations to stakeholders? One answer is that misguided executive compensation plans often reward insiders for short term corporate performance as measured by the value of the stock. If not paying workers overtime pay or cutting corners on product safety means profits in the short term, executives who want to see larger year-end bonuses will take the short cuts. While executive compensation plans should be written to properly incentivize insiders, stakeholders can have a real impact by knowing the laws that regulate corporations and taking action to enforce them. These laws range from securities laws to consumer and labor laws. With this in mind, this site has been developed with the intent of providing an overview of the laws that regulate corporate conduct.

and another thing . . .

The Tragedy of the Clemens
Federal prosecutors have indicted former baseball star pitcher, Roger Clemens, for lying to Congress about his alleged use of steroids.

Whether Roger Clemens took steroids and whether, if he took steroids, his statistics need to be placed in a different light undoubtedly is proper banter for the sports pages.

This country has...
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Articles:
  • Corporate Integrity Agreements: Asking the Companies to Police Themselves, Please
    The use of a corporate integrity agreements (“CIA”) in resolving the prosecution of pharmaceutical and medical companies is commonplace. As part of a deferred prosecution agreement, the U.S. Department of Justice, or the U.S. Department of Health and Human Services, Office of Inspector General, will ask the defendant corporation to enter into a CIA to police its behavior and, in part, ensure compliance with the terms of the settlement.
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Corporate Insider News:
SEC Seeks Return of $4 Million in Bonuses and Stock Sale Profits From Former CEO of CSK Auto Corp. PDF Print E-mail
Enforcement Action Is First Solely Under "Clawback" Provision of Sarbanes-Oxley Act
 
Washington, D.C., July 22, 2009 — The Securities and Exchange Commission today asked a court to order the former chief executive officer of CSK Auto Corporation to reimburse the company and its shareholders more than $4 million that he received in bonuses and stock sale profits while CSK was committing accounting fraud. Enforcement Action Is First Solely Under "Clawback" Provision of Sarbanes-Oxley Act
 
FOR IMMEDIATE RELEASE
2009-167
 
Washington, D.C., July 22, 2009 — The Securities and Exchange Commission today asked a court to order the former chief executive officer of CSK Auto Corporation to reimburse the company and its shareholders more than $4 million that he received in bonuses and stock sale profits while CSK was committing accounting fraud.
 
The SEC's enforcement action charges Maynard L. Jenkins of Scottsdale, Ariz., with violations of the Sarbanes-Oxley Act (SOX). It is the first action seeking reimbursement under the SOX "clawback" provision (Section 304) from an individual who is not alleged to have otherwise violated the securities laws. The SOX "clawback" provision deprives corporate executives of money that they earned while their companies were misleading investors.
 
"The personal compensation received by CEOs while the companies they serve engage in wrongdoing can be clawed back," said Robert Khuzami, Director of the SEC's Division of Enforcement. "The costs of such misconduct need not be borne by shareholders alone."
 
"Jenkins was captain of the ship and profited during the time that CSK was misleading investors about the company's financial health," said Rosalind R. Tyson, Director of the SEC's Los Angeles Regional Office. "The law requires Jenkins to return those proceeds to CSK."
 
According to the SEC's complaint filed in U.S. District Court for the District of Arizona, Jenkins made $2,091,020 in bonuses and $2,018,893 in company stock sales that should have been reimbursed to CSK pursuant to SOX Section 304.
 
This is the third enforcement action in the SEC's investigation into CSK's alleged accounting misconduct. In March 2009, the SEC charged four former CSK executives with securities fraud. In May 2009, the SEC brought a settled enforcement action against CSK for filing false financial statements for fiscal years 2002 through 2004.
 
CSK was an automotive parts and accessories retailer headquartered in Arizona during the relevant time period of the misconduct alleged in the SEC's enforcement actions. In July 2008, CSK became a wholly-owned subsidiary of O'Reilly Automotive, Inc.
 
According to the SEC's complaint against Jenkins, CSK was required to prepare an accounting restatement due to its fraudulent conduct. While Jenkins served as CEO, CSK filed two such restatements related to its overstated vendor allowances.
 
The SEC alleges that, in violation of Section 304, Jenkins failed to reimburse CSK for bonuses, or other incentive-based or equity-based compensation, and profits from the sale of CSK stock he received during the 12-month periods following the filing of each of CSK's fraudulent financial statements. The SEC's complaint does not allege that Jenkins engaged in the fraudulent conduct.
 
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