Securities Fraud Lawsuit Finale: Bonus Payback

Securities Fraud Lawsuit Finale: Bonus Payback

By John Curran

Plaintiffs who file claims with the help of securities fraud lawsuit lawyers are not the only people who are negatively impacted by executives’ malfeasance.  That’s why one medical device manufacturer may be getting back millions of dollars from two of its executives.

Two ArthroCare (NASDAQ: ARTC) vice presidents were charged with wire fraud and securities fraud. While the company ended up settling with investors for about $74 million, the actual fraud cost stock buyers roughly $400 million. Criminal charges against the two vice presidents are ongoing, but the SEC has done something that should be heartening for those who are affected by stock fraud.

Section 304 of the Sarbanes-Oxley Act enables the SEC to force senior executives to return money that they received as equity as well as bonuses. While the only two senior officers who are affected are the chief executive officer and chief financial officer, it reminds many corporations that oversight is a key responsibility.

Any bonuses and equity that ArthroCare CEO Michael Baker and CFO Michael Glock received in 2009 will be returned to ArthroCare. It is one of the first times that section 304 has been applied to a stock fraud case. There have been less than 20 instances of the SEC filing a claim for what is known as a “clawback” of executive compensation.

While securities fraud lawsuit attorneys fight for their clients to gain back some of the money lost by shady employees at companies, investors aren’t the only ones affected. ArthroCare’s stock dropped precipitously when the fraud was uncovered, and it was clear to many financial analysts that it was only the work of a few rogue officers, rather than the company as a whole. While the Section 304 claim is rare, it does provide companies with a way to move past cases like these the same way that stock fraud lawsuit attorneys do for private citizens.

If you or someone you know were bilked out of money and think it was because of securities fraud, get educated. Visit our Securities Fraud, Stock Fraud Investment Class Action Lawsuit Investigation now and fill out the short form for a free legal consultation. An experienced stock fraud lawsuit attorney will contact you to review the facts of your potential case. You may be entitled to damages to offset your investment losses. It starts with getting a no-cost legal review from one of our securities fraud lawsuit lawyers today.

Updated November 15th, 2012

All securities fraud class action and lawsuit news updates are listed in the Stocks & Securities section of Top Class Actions