2nd Circ. Throws Out DHB Shareholder Settlement

Law360, New York (September 30, 2010, 2:32 PM EDT) -- A federal appeals court threw out a settlement Thursday between convicted fraudster David Brooks, the former CEO of body armor maker DHB Industries Inc., and the company's shareholders, saying the agreement violated the Sarbanes-Oxley Act.

The U.S. Court of Appeals for the Second Circuit said the agreement is contrary to Section 304 of SOX, which requires CEOs and chief financial officers to pay back to their company any bonuses or profits from stock sales if financial statements had to be corrected because of misconduct.

The Second...
To view the full article, register now.