Exploring Corporate Governance Around the World

By Allison Garrett, Senior Vice President for Academic Affairs at Oklahoma Christian University

Friday, September 30, 2005

No Private Right of Action Under SOX Section 304

In Neer v. Pelino, Judge Stewart Dalzell ruled that SOX section 304 does not create a private right of action. Section 304 is the provision that requires disgorgement of bonuses from executives. Judge Dalzell held that section 304 was intended by Congress to be enforced by the SEC and not by private litigants.

Once Judge Dalzell dismissed the section 304 claim, only state law claims remained. The Judge dismissed those, too, electing not to exercise supplemental jurisdiction over the state law claims.


The full text of the opinion can be viewed at: http://www.perkinscoie.com/content/ren/updates/corp/101405neer.pdf

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