SEC Succeeds in Beazer CEO Clawback Claim

Bloomberg reports that Ian McCarthy, CEO of Beazer Homes, has agreed to return $6.5 million in bonuses and incentive-based pay in a settlement with the SEC for violations of the Sarbanes-Oxley Act. McCarthy signed off on Beazer’s FY2006 financial reports, attested to the strength of the company’s internal controls, and asserted a lack of fraud. Subsequently, it was determined that the company’s financial statements were fraudulent. The settlement does not admit or deny any wrongdoing. The SOX Act gave the SEC the power to claw back bonuses and profits from stock sales due to financial misconduct.