SEC Reopens Comment Period On Deeply Flawed Proposed Claw-Back Rules

Seven years ago, the Securities and Exchange Commission proposed rules that would direct the national securities exchanges and national securities associations to establish listing standards that would require each issuer to develop and implement a policy providing for the recovery, under certain circumstances, of incentive-based compensation based on financial information required to be reported under the securities laws that is received by current or former executive officers, and require disclosure of the policy. Last fall, the SEC reopened the comment period for those rules. That comment period expired last November. Just this week, the SEC's staff of the Division of Economic and Risk Analysis issued a memorandum that provides additional analysis and data on compensation recovery policies and accounting restatements. Accordingly, the SEC has reopened its proposal for another 30 days.