The Security Exchange Commission Filed Charges Against...

Background The security exchange commission filed charges against Rite Aid’s senior executives on June 21, 2002. (SEC Announces Fraud Charges Against Former Rite Aid Senior Management) These charges were on the basis of accounting fraud and were filed against senior leadership ranging from the former CEO to a former Vice Chairman, specifically Martin Grass the chief executive officer, Frank Bergonzi the chief financial officer, and Franklin Brown a former vice chairman. Security and exchange commission alleged that â€Å"Rite Aid overstated its income and every quarter from May 1997 to May 1999.† (SEC Announces Fraud Charges Against Former Rite Aid Senior Management) they also alleged that there were related party transactions that were never reported as well as finance committee meetings had had the minutes fabricated by Grass. The Securities and Exchange Commission is looking to have several punishments placed on the executives. â€Å"The commission is seeking this disgorgement of annual bonuses and imposition of civil penalties against Grass, Bergonzi, and Brown.† (SEC Announces Fraud Charges Against Former Rite Aid Senior Management). Disgorgement of annual bonuses as required by section 304 of Sarbanes-Oxley act of 2002. This essentially requires that the executives forfeit any bonuses or income that they had earned during the 12 month period following the start of the fraud. â€Å"Any bonuses or other incentives or equity-based compensation that they received during the 12Show MoreRelatedCorporate Governance Benchmarking Paper6593 Words   |  27 Pagesproducts and services to major organizations and individual customers. HP produced revenues over $115 million in 2008. Even though HP has generated millions in profit, the company has faced a major challenge of unethical practices. 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