A federal district court judge is letting the Securities and Exchange Commission proceed with a novel lawsuit testing just how far the agency can go to claw back compensation executives receive improperly.
The case pits the SEC against Maynard Jenkins, former CEO of auto parts retailer CSK Auto Corp. The agency wants Jenkins to return more than $4 million in bonuses and compensation he received based partly on fraudulent financial results, even though Jenkins had no knowledge of the fraud and has never been accused by the SEC of any wrongdoing.
Jenkins’ lawyers had argued that such enforcement exceeds ...