On September 15, 2009, Maynard Jenkins filed a motion to dismiss the SEC’s high-profile case against him. As previously discussed here and in this guest column by Nader H. Salehi and Elizabeth A. Marino of Bingham McCutchen LLP, the SEC charged Jenkins with violations of the Sarbanes-Oxley Act in what it acknowledges to be “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.”
Jenkins comes out swinging in the motion, arguing in the opening paragraphs that :
In this case, the Securities and Exchange Commission (“SEC”) is attempting to impose a Draconian penalty on an admittedly innocent person. The defendant, Maynard Jenkins, is the 67 year old former CEO of CSK Auto Corporation (“CSK”). The SEC does not contend that Mr. Jenkins participated in or condoned any fraud at CSK. Nor does it assert that he was negligent. Instead, the SEC claims that Mr. Jenkins should forfeit millions of dollars because other employees that worked at CSK, unbeknownst to him, committed misconduct and hid it from him. The SEC’s nonsensical view is that Mr. Jenkins must pay (literally and figuratively) for that misconduct by others because he was the “captain of the ship, despite the fact that under its own view of the evidence, his crew was mutinous – deceiving him, and secretly circumventing the ship’s controls.
Read the Jenkins Motion to Dismiss
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Perhaps Mr. Jenkins, and his board, failed to fulfill their obligation to provide a system of internal control necessary to prevent such mutiny. It’s what he said he did when he certified. The investor public had every reason to believe he was managing.