SEC v. Jensen
United States Court of Appeals for the Ninth Circuit
835 F.3d 1100 (2016)
Basin Water CEO Jensen and CFO Tekulve (defendants) each signed financial statements the SEC (plaintiff) alleged overstated company revenues to defraud investors, and the SEC sued for violating Rule 13a-14's requirement that CEOs and CFOs certify their company's financial statements as accurate; the district court granted the defendants summary judgment, ruling the SEC lacked a cognizable claim against officers who merely certified false statements without direct involvement in creating the falsities.
Whether, under the Sarbanes-Oxley Act, the SEC may seek disgorgement of profits from a company's CEO and CFO even if those officers were not directly involved in the underlying company misconduct.