US Sec. & Exchange Comm’n v. Jensen

(United States Ninth Circuit) – In an enforcement action filed by the Securities and Exchange Commission (SEC) alleging that the defendants participated in a scheme to defraud investors by reporting millions of dollars in revenue that were never realized, the District Court’s judgment in favor of defendant-corporate officers is vacated where: 1) Rule 13a-14 of the Securities Exchange Act provided the SEC with a cause of action not only against Chief Executive Officers and Chief Financial Officers who did not file the required certifications, but also against CEOs and CFOs who certified false or misleading statements; and 2) the disgorgement remedy authorized under Section 304 of the Sarbanes-Oxley Act applied regardless of whether a restatement was caused by the personal misconduct of an issuer’s CEO and CFO or by other issuer misconduct.