Congress never granted individual shareholders the right to sue corporate executives under Section 304 of the Sarbanes-Oxley Act, says a federal judge.
A federal judge ruled that shareholders cannot file derivative lawsuits under Section 304 of the Sarbanes-Oxley Act, according to Law.com. Section 304 of Sarbox allows for the disgorgement of profits and bonuses from top corporate executives in alleged accounting scandals.
The website points out that the decision by U.S. District Judge Stewart Dalzell is the first that addresses whether Section 304 creates an implied private right of action. The judge made it clear that only the Securities and Exchange Commission can enforce the provision, according to the report.
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