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The article discusses judicial milestones concerning Ponzi scheme clawbacks and remedies in Utah. Topics explored include the filing of clawback lawsuits by bankruptcy trustees to recover payments made in Ponzi schemes, the fraudulent transfer provision of the Federal Bankruptcy Code, and the U.S. court cases which contributed to the development of the Ponzi clawback law such as Cunningham v. Brown in 1924 and Alexander v. Compton in 2000.

Section 304 of the Sarbanes-Oxley Act (hereafter, SOX), commonly known as the clawback provision, entitles the Securities and Exchange Commission (SEC) to sue the CEO and CFO in an attempt to recover their incentive compensation based on misstated financial reports. Although a stream of literature investigates the effects of voluntary firm-initiated clawback provisions, this study explores the effects of the mandatory SOX clawback provision on the likelihood of financial misstatements and CEO compensation. We find a significant decrease in the association between CEO in-the-money option value and the likelihood of a financial misstatement surrounding SOX, suggesting the SOX clawback provision has been effective in reducing financial misstatements arising from CEO in-the-money stock options. To examine the effects of the SOX clawback provision on CEO compensation, we identify a set of misstatement firms with a high restatement likelihood where the CEOs are most likely concerned with the impact of the SOX clawback provision on their compensation. We find that compared with control firms, these misstatement firms with a high restatement likelihood where the CEO is the chair of the board exhibit an increase in CEO salaries between the pre- and post-SOX periods, suggesting that in the post-SOX period, powerful CEOs are able to receive higher salaries which are not subject to the SOX clawback provision. [ABSTRACT FROM AUTHOR]

We analyze the effects of regulatory interference in compensation contracts, focusing on recent mandatory deferral and clawback requirements restricting incentive compensation of material risk‐takers in the financial sector. Moderate deferral requirements have a robustly positive effect on risk‐management effort only if the bank manager's outside option is sufficiently high; otherwise, their effectiveness depends on the dynamics of information arrival. Stringent deferral requirements unambiguously backfire. Our normative analysis characterizes whether and how deferral and clawback requirements should supplement capital regulation as part of the optimal policy mix. [ABSTRACT FROM AUTHOR]

We examine two ways through which student financial aid can be reformed: a cut in the rate at which the aid is clawed back with earned income or an increase in the threshold at which this clawback applies. We present a theoretical and empirical analysis of these options. We show that both reduce incentives to work, although the clawback rate does so less. Cuts to clawbacks also deliver a bigger boost to financial aid for those most in need, although they may benefit students higher in the income distribution. We argue that governments might consider a policy that reduces clawback rates, but within a reasonable range of earned income. [ABSTRACT FROM AUTHOR]

The quest for uniformity in the private international law relating to succession has a long history. It is only with the adoption of the EU Succession Regulation that a major success was achieved in this field. Although the Regulation should receive a largely positive appraisal, it also suffers from certain drawbacks that will require a careful approach by courts and other authorities as to the practical application of the Regulation. The authors address selected difficulties that arise under its provisions and make suggestions for future review and reform. The article starts with the central notion of habitual residence and discusses the possibility of having a dual habitual residence. It then moves to discuss choice of law and recommends to broaden further party autonomy in the area of succession law. Some more specific issues are also addressed, including legacies by vindication, the relationship between the law applicable to succession, the role of the legis rei sitae and the law applicable to the registries of property, estates without a claimant, the special rules imposing restrictions concerning or affecting succession in respect of certain assets, as well as the exclusion of trusts. Some proposals for clarifications are made in that regard. [ABSTRACT FROM AUTHOR]

Firms sometimes break the law. When they do, a host of government agencies have power to bring enforcement actions against them, which serve to punish past wrongs, compensate victims, disgorge unlawful gains, deter others, and prevent recidivism. Each of these purposes but one--preventing recidivism--is either met or not once the case reaches settlement. Whether recidivism will occur, however, remains uncertain at the time a case is settled. In light of that uncertainty, this Article takes a critical look at how enforcers currently address recidivism prevention--what it dubs the "clawback" approach--under which defendant firms receive penalty credit today in exchange for remedial efforts that, it is hoped, will prevent recidivism tomorrow. This Article examines the incentives and constraints of the two parties--the enforcer and the firm--and concludes that an alternative "follow-up" approach that credits only firms' demonstrated results would be more effective and efficient at recidivism prevention. [ABSTRACT FROM AUTHOR]

Executive pay clawback provisions require executives to repay previously received compensation under certain circumstances, such as a downward adjustment to the financial results upon which their incentive pay was predicated. The use of these provisions is on the rise, and the SEC is expected to soon finalize rules implementing a mandatory, no-fault clawback requirement enacted as part of the Dodd-Frank legislation. The tax issue raised by clawbacks is this: should executives be allowed to recover taxes previously paid on compensation that is returned to the company as a result of a clawback provision? This Article argues that a full tax offset regime is most in keeping with the evolving rationales for clawbacks, with consistent treatment of executives subject to clawbacks, with encouraging even-handed implementation of clawbacks, and with minimizing clawback-induced distortions and other unintended consequences associated with a tax regime that would not provide full offsets. But the tax treatment of clawback payments has been uncertain, and the enactment of the Tax Cuts and Jobs Act adds to that uncertainty. Meanwhile, adoption of legislation to ensure that executives are fully compensated for taxes previously paid on recouped compensation is probably a political non-starter. Given that, this Article argues that the IRS and courts should interpret the relevant tax laws liberally to maximize recovery of taxes paid on clawed back compensation. [ABSTRACT FROM AUTHOR]

A study on the effects of adopting a compensation provision on a company's financial report quality is presented. It notes that clawback provisions allows firms to recoup compensation from executives. According to this study, voluntarily adopted clawback provisions have a number of trigger events including ethical misconduct and executive fraud. The study find evidence consistent with clawback-adopters experiencing improvement in financial reporting quality, increase in pay-for-performance sensitivity and increase in executive compensation.

Companies are adopting executive compensation recoupment ("clawback") policies to discourage aggressive financial reporting choices. Recent research suggests clawback policies encourage other means of meeting earnings expectations. We suggest that reducing income tax expense is a means of meeting earnings expectations. We find that effective tax rates are lower after clawback adoption due to increased investments in tax planning. We identify three tax planning activities that clawback companies invest in to lower effective tax rates: purchases of auditor-provided tax services, increased connections to other low-tax companies, and use of tax havens. We provide evidence that effective tax rate decreases do not result from use of opportunistic income tax accruals, and that decreases are stronger among companies that adopt robust clawback policies. Additional tests indicate lower tax outcome volatility and longer, more readable tax footnotes following clawback adoption. Our results suggest a positive spillover effect of clawback adoption on corporate tax policy. [ABSTRACT FROM AUTHOR]

Both the Sarbanes–Oxley Act of 2002 and the Dodd-Frank Act of 2010 include clawback provisions that require executives to pay back incentive compensation earned on financial statements that are restated in a subsequent period. Such provisions intend to reduce unethical reporting behavior by executives who otherwise might be more inclined to misstate financial statements to boost incentive-based compensation. However, such provisions could promote rather than deter unethical behavior. In particular, Pyzoha (Account Rev 90(6):2515–2536, 2015) finds that, under certain conditions, executives are less willing to restate financial statements in the presence of a clawback policy. Similarly, auditors might also act unethically by being less likely to propose restatements in the presence of clawbacks to avoid upsetting management. To examine this possibility, this study reports the results of three experiments that examine the effect of clawback provisions on auditor judgment. Contrary to expectations, our three experiments, along with supplemental qualitative evidence (surveys and interviews of practicing auditors) consistently indicate that clawbacks do not affect auditors' propensity to propose restatements. These results suggest that a decrease in the number of restatements in a clawback environment will not be due to auditors acting unethically to appease management. The effects of clawbacks on auditors' risk assessments, however, are less conclusive. As such, we offer potential post hoc explanations to guide future research. [ABSTRACT FROM AUTHOR]

Tuition clawback lawsuits are a relatively recent phenomenon in bankruptcy in which trustees are attempting to recover tuition that was paid to universities by insolvent parents for their adult children's education. This Note contains an Appendix that catalogs iy 2 tuition clawback lawsuits to help examine and explain what is happening. Out of the cases that have been ruled on, courts have struggled with the question of whether tuition payments by insolvent parents are constructively fraudulent. More specifically, the main point of debate has been whether tuition paid by an insolvent parent for an adult child provides "reasonably equivalent value" to the debtor-parent(s). Based on an analysis of thefacts of 152 tuition clawback lawsuits arid the historical development of fraudulent transfer law, this Note concludes that tuition payments for an adult child do not provide reasonably equivalent value to their parents. Although this conclusion would resolve the current split on the question, it does not necessarily provide a solution that balances the rights of creditors with the rights of parents to help their children and the rights of universities to be protected. Thus, this Note proposes amendments to the Bankruptcy Code to better strike a balance between competing rights arid policy considerations. [ABSTRACT FROM AUTHOR]

We examine how board co-option, defined as the fraction of the board comprising directors appointed after the CEO assumed office, is related to clawback adoption. We find that co-opted boards have a lower probability of adopting clawback provisions. Further, the negative association between board co-option and clawback adoption is more pronounced when at least one co-opted member is on the compensation committee and when there is a higher likelihood that a clawback provision will be triggered. Finally, we find that board co-option is an important mechanism through which longer tenured CEOs reduce the likelihood of clawback adoption. [ABSTRACT FROM AUTHOR]

Firms trade off CFOs' fiduciary duties against their decision-making duties when designing CFO bonus plans. Decreasing bonus incentives tied to financial measures benefits CFOs' fiduciary responsibilities at the expense of motivating their decision-making duties. As prior research indicates that clawbacks increase personal misreporting costs through the loss of previously awarded compensation, we examine whether clawbacks allow firms to increase incentives in CFO bonus contracts. Based on a sample of U.S. firms between 2007 and 2013, we find that clawbacks are associated with greater CFO bonus incentives. We also find the increase in incentives to be more pronounced for CFOs relative to other executives. Our results are moderated by firms' susceptibility to misreporting. The relation between clawbacks and incentives is weaker when firms experienced internal control deficiencies, have larger abnormal accruals, when CFOs are more vulnerable to pressure from CEOs, and when audit committees have less financial expertise and prestige. [ABSTRACT FROM AUTHOR]

The possibility to apply clawback actions to mergers and spin-off corporate transactions within the bankruptcy proceedings has been put into question by the Academia and case law. In a recent judgement of November 21, 2016, the Spanish Supreme Court has ruled for the first time with regard to this controversy, endorsing the majority position as stating the resistance of mergers and spin-offs to the insolvency clawback actions. In this paper we intend to explore the arguments for both positions and develop a critical analysis on the sufficiency, in a bankruptcy scenario, of the instruments provided by Spanish Corporate Law to protect creditors affected by these type of transactions. [ABSTRACT FROM AUTHOR]

While clawback provisions have been used in legal cases for decades, only after the passage of the Sarbanes‐Oxley Act of 2002 and the Dodd‐Frank Act of 2010 has the idea of clawback provisions in executive compensation contracts begun to talk hold in the U.S. Although the Securities and Exchange Commission has yet to implement final rules regarding clawback provisions for public companies, in recent years academic researchers have begun to investigate how the voluntary adoption of clawback provisions might impact financial reporting quality, compensation paid to covered executives, firm value, and a host of other firm‐level factors. The purpose of this article is to review select relevant clawback research published in premiere accounting and finance academic journals in recent years to better gauge the implications of clawback adoption and to attempt to discern any corporate governance effects of clawback adoption. [ABSTRACT FROM AUTHOR]

“Clawbacks” are much discussed in the context of senior executive compensation, yet the discussion has largely ignored the presence of holdbacks that are already in place in many firms. Holdbacks are deferred compensation that is potentially foregone in the event that the CEO leaves the firm without good reason or they are dismissed for wrong‐doing. They are explicit or written features of a CEOs employment contract. Holdbacks are already in use at 70% of S&P 500 firms and average $18.4 million each. Firms with higher CEO replacement costs, greater information asymmetry, a recent bad experience (fraud, lawsuit, or restatement), or in more certain environments are more likely to have a holdback. In contrast, clawback adoptions are mainly driven by firms' bad experiences and external pressure from shareholders. Holdbacks and incentive‐based compensation are substitutes, as termination incentives can reduce the need for incentive compensation. As managers reasonably demand a premium for accepting risky compensation, a measure of abnormal compensation is positively associated with holdbacks, but there is no significant association between clawbacks and holdbacks. These findings suggest that the holdbacks many firms already have in place could help an “ex‐post settling up” in the event of financial misconduct, or even simply misstated financials. As companies have more control over the amounts held back ex‐ante, holdbacks are potentially more efficient. [ABSTRACT FROM AUTHOR]

Reviews of articles "How to Evaluate Risk Management Units in Financial Institutions?" by Michael Gelman, Doron Greenberg and Mosi Rosenboim, "Fiduciary Duties of Corporate Directors in Uncertain Times " by Ira M. Millstein and Ellen Odoner, and "Clawbacks, Holdbacks, and CEO Contracting" by Stuart Gillan and Nga Nguyen, which appeared in the periodical "Journal of Applied Corporate Finance", are presented.

We examine the effect of corporate governance on the likelihood of clawback provision adoption, and its consequences in terms of corporate investment practices and risk-taking behavior. We find that firms with strong governance (as proxied by board independence, diligence, and size) are positively associated with the firm's adoption of a clawback provision; whereas firms with weak governance (as proxied by management entrenchment, i.e., CEO duality status and tenure) are negatively associated with clawback provision adoption. Using the propensity-score matching, difference-in-differences research design, and inverse Mills ratio to mitigate omitted variables and self-selection biases, we find that after adopting a clawback provision, firms' abnormal investment decreases and the firms' investments are less risky. [ABSTRACT FROM AUTHOR]

Manuscript Type Empirical Research Question/Issue This study tests whether the adoption of clawback provisions mitigates overinvestment. A clawback provision is a recoupment policy that allows certain bonuses previously paid to executives to be cancelled or 'clawed back' if financial statements are restated. Research Findings/Insights This study focuses on 1,093 voluntary clawback adopters in the United States during 2006-2012 and uses propensity score matching to obtain a matched sample. We then perform a difference-in-differences analysis to assess pre- and post-adoption changes in overinvestment. The empirical results show that (i) clawback provisions mitigate overinvestment, and (ii) overinvestment decreases most for those executives identified as overconfident or receiving higher option compensation. Theoretical/Academic Implications Agency conflict between shareholders and executives distorts a firm's investment decisions. According to the agency-based explanation, better financial reporting quality decreases information asymmetry. Clawback provisions improve financial reporting and mitigate potential overinvestment under agency conflict. To the best of our knowledge, no other published study has discussed executives' investment behavior or has reported that one benefit of clawback provisions is mitigating ex post overinvestment. It is important for regulators and academics to understand how clawback provisions impact executives' behavior. Practitioner/Policy Implications The results of this study provide political implications for mandatory clawback provisions under Section 954 of the Dodd-Frank Act after 2016 in the US. Given that we show that voluntarily adopting clawback provisions curbs overinvestment, it is important to examine whether this new act should place restrictions on the form of executive pay. [ABSTRACT FROM AUTHOR]

The article offers information on several case law development related to securities law. Topics discussed include decision of the U.S. Supreme Court in the case SEC v. Dirks regarding the duty cognizable under Rule 10b-5 of the U.S. Securities and Exchange Commission (SEC) insider trading theory, decision of the U.S. Court of Appeals for the District of Columbia in Lindeen v. SEC on credit retention rule jointly issued by the SEC and banking agencies and SEC v. Jensen on clawback.

In the wake of Ponzi schemes, federal courts often appoint receivers to recoup stolen money for the benefit of the defrauded investors. A receiver's primary function is to claw back money that the Ponzi scheme paid to so-called winning investors and others. But the courts should supervise more closely--and in many instances may wish to preclude altogether--receiver actions for negligence or secondary liability, for example, lawsuits alleging that a financial institution aided and abetted the fraudsters. As the authors explain, allowing receivers to bring these secondary liability actions may not best serve the defrauded investors, whose interests may conflict with the receivers'. Moreover, such actions tend to impose undue burdens on defendants, as Ponzi scheme receivers routinely seek special treatment not available to other litigants. [ABSTRACT FROM AUTHOR]

The paper examines legal certainty and predictability in the context of the youngest field of EU private international law–succession law. The author looks at the extent to which the provisions of the EU Succession Regulation provide for legal certainty and predictability in enabling EU citizens to plan their international estates in advance. The paper critically examines selected concepts of the EU Regulation from the perspective of legal certainty: (a) the current state of the concept of habitual residence of the deceased that is the key connecting factor in the Succession Regulation, (b) party autonomy for the testator, (c) escape clauses, (d) the conflict of laws treatment of incidental questions and (e) lifetime gifts and clawback. The conclusion of the paper is that although the Succession Regulation is designed to offer legal certainty, it does not achieve it in all cases, unless the testator actively exercises the party autonomy that it offers. [ABSTRACT FROM AUTHOR]

The article focuses on urban development with the history of land banking and the emergence of the new land banking movement. Topics discussed include concept of re-blight and explaining how land banks use contractual clawback mechanisms to prevent it, analogy between land banks and mortgage lenders and real estate consumer protections by relying on contractual clawback provisions to subvert the foreclosure process.

Proposed regulations have recently been issued to clarify the operation of Section 707(a)(2)(A), enacted more than 30 years ago. The proposed regulations are aimed primarily at abusive private equity management fee waivers but potentially affect other nonabusive transactions. This article considers the background of Section 707(a)(2)(A) as an anti-abuse provision and the proposed clarification of the entrepreneurial risk approach. The proposed regulations offer a relatively painless method of avoiding Section 707(a)(2)(A) if the service provider is willing to agree to a so-called "clawback obligation," a common feature in private equity arrangements. The article illustrates the operation of the clawback mechanism in a deal-by-deal carried interest arrangement using target allocations. Despite Treasury's broader regulatory authority to address capital gain conversion, the proposed regulations suggest that reform may yet again bypass carried interests. [ABSTRACT FROM AUTHOR]

Having regard to the constitutional provisions concerning the national public budget, which establish, as a matter of principle, that the national public budget comprises the State budget, the State social security budget, and the local budgets of parishes, towns, and counties [1], made up mostly from fees, as well as from other revenues, in this paper, I intend to examine to what extent the separate imposition of non-harmonised direct taxes is compatible with the constitutional provisions on the fair distribution of the tax burden. [2] In this context, I note that the constitutional legislature itself [3] has foreseen the possibility of setting up funds, available to entities, but provided that the amounts representing contributions to such funds be used exclusively for their intended purpose. Such contributions complement the budgetary resources and the imposition thereof can be achieved through infraconstitutional rules. One example is Government Emergency Ordinance no. 77/2011 establishing a contribution to finance expenditures on health. [4] [ABSTRACT FROM AUTHOR]

The article focuses on the protection of Geographical Indications (GIs) in Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) with the creation of a multilateral system of notification and registration of wines. It mentions that agriculture negotiations is the claw-back proposal with a focus on the European Union (EU). It also mentions that approach of World Trade Organization (WTO) with the influence of free trade agreements on the GI extension.

Using a sample of 195 unique real estate investment trusts (REITs), we examine factors related to the adoption of clawback provisions within managerial compensation contracts. In general, we find strong and consistent empirical evidence that clawback provision are directly related to firm size, complexity, leverage, growth options, monitoring incentives, and CEO performance incentives. We also find that clawbacks are associated with enhanced market and accounting performance, with stronger performance relations observed for adoption decisions tied directly to regulatory mandates. In sum, we conclude compensation clawback provisions represent a value-relevant, strategic governance mechanism for REITs. [ABSTRACT FROM AUTHOR]

Prior archival studies find that firms that voluntarily adopted clawback policies have experienced a reduction in restatements. I experimentally examine this outcome by investigating the influence of two key factors (i.e., executive compensation structure and auditor quality) on financial reporting executives' (hereafter, ''executives'') decision-making regarding a proposed restatement that will lead to a clawback of their incentives. I find that executives (i.e., CFOs, controllers, and treasurers) facing a lower quality auditor are less likely to agree with amending prior financial statements when a higher proportion of their pay is incentive-based. However, this tendency is reduced when executives face a higher quality auditor, indicating that higher quality auditors can act as effective monitors. My results identify an ex post unintended consequence of clawback regulation that could at least partially offset the benefits of the ex ante deterrent effects of clawbacks, and that could contribute to findings of less frequent restatements when clawback policies are in place. I discuss potential implications regarding the role of executives during restatement decisions and auditors' risk assessments in a clawback environment. [ABSTRACT FROM AUTHOR]

Purpose – To examine the proposed rules issued by the Securities and Exchange Commission (SEC) pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which, if adopted, would require national stock exchanges to establish listing standards that would require listed issuers to adopt so-called clawback policies for the recovery of excess incentive-based compensation in the event that an issuer is required to prepare an accounting restatement resulting from material noncompliance with any financial reporting requirement. Design/methodology/approach – The article discusses the SEC’s proposed rules, including the circumstances that would require recovery of excess incentive-based compensation, the types of compensation that, and the individuals whose compensation, would be subject to recovery, and certain new disclosure requirements for listed issuers. Findings – The SEC’s proposed rules will, if adopted, impose additional burdens on listed issuers to adopt and comply with recovery policies for excess incentive-based compensation and adhere to new public disclosure requirements. Originality/value – Expert analysis from experienced securities and executive compensation lawyers. [ABSTRACT FROM AUTHOR]

We analyze the costs and benefits of clawback provisions that enable firms to recover incentive compensation from top management if financials are restated. In a simple contracting model, we find that a clawback provision effectively lengthens the horizon of incentives and curbs misreporting. However, such a provision can add noise to the underlying performance measure, reducing managerial effort and firm value. Our empirical tests support the model’s predictions regarding which types of firms are likely to voluntarily use clawback provisions. We also document that clawback provisions are associated with higher reporting quality, greater CEO pay-for-performance sensitivity, and higher CEO compensation. [ABSTRACT FROM PUBLISHER]

High-profile scandals in the sports world, exemplified by Lance Armstrong and Tiger Woods, expose endorsement companies to financial and reputational risks. Endorsement contracts today rely on morality clauses to mitigate this risk of exposure, which unduly restricts a company's response to an athlete's misconduct. Clawback clauses, on the other hand, provide companies with a mechanism to fully protect their investment in the employee or sponsored athlete. This Note discusses the practicality of introducing clawback clauses into athletic endorsement contracts. Although many factors inhibit endorsement companies from implementing clawback clauses into endorsement contracts, more beneficial alternatives exist that companies can pursue to better protect themselves rather than relying solely on morality clauses. This Note argues that the most practical alternative to the morality clause includes adopting specific contracting techniques in contrast to the untried clawback provision. [ABSTRACT FROM AUTHOR]

To deter financial misstatements, many companies have recently adopted compensation recovery policies--commonly known as ''clawbacks''--that authorize the board to recoup compensation paid to executives based on misstated financial reports. Clawbacks have been shown to reduce financial misstatements and increase investors' confidence on earnings information. We show that the benefits come with an unintended consequence of certain firms substituting for accruals management with real transactions management (e.g., reduce research and development [R&D] expenditures), especially firms with strong incentives to achieve short-term earnings targets, such as firms with high growth or high transient institutional ownership. As such, the total amount of earnings management does not decrease subsequent to clawback adoption. We further show that although real transactions management temporarily boosts those clawback adopters' short-term profitability and stock performance, this trend reverses after three years. In summary, clawbacks may have unexpected effects for a subset of firms whose managers are under greater pressure to meet earnings goals. [ABSTRACT FROM AUTHOR]

We examine whether US firms' M&A decisions influence the likelihood of voluntary adoption of clawback provisions in executive compensation contracts and whether clawback adoption improves subsequent M&A decisions. Because prior research finds that poor M&A decisions are associated with future earnings restatements, we predict that clawback adoption is more likely after these transactions. We further conjecture that M&A decisions will improve after clawback adoption, as its presence reduces executives' willingness to manipulate post-acquisition earnings. Consistent with our expectations, we find that (1) firms with more negative M&A announcement returns are more likely to adopt clawbacks; (2) firms that acquire targets with relatively poor accounting quality are more likely to adopt clawbacks; (3) clawbacks improve investor perception of M&A quality; and (4) executives are more responsive to the market when completing M&A deals if their compensation contracts include clawbacks. These results suggest that boards take a pro-active approach and consider factors that may lead to restatements when adopting clawbacks. Our results have implications for US policymakers, as the Dodd-Frank Act of 2010 requires mandatory adoption of clawbacks. Our results also suggest that non-US firms can reduce managerial incentives to manipulate post-takeover earnings by using clawbacks. [ABSTRACT FROM AUTHOR]

The article discusses the potential use of clawback provisions in sports contracts for professional athletes in America, and it mentions morals clauses in contracts and college coaching contracts, as well as the economic aspects of endorsement deals for athletes. According to the article, clawback provisions generally provide "stipulated damages when executives profit off of trades that they made by virtue of illegal or unethical trading practices." Athletes such as Tiger Woods are examined.

The performance of economic systems depends both on using resources with maximum efficiency and on society's income redistribution. Any socio-economic decision has to ensure Pareto efficiency or, according to the Kaldor-Hicks principle, to provide net benefit after the compensation of the involved social costs. Health and education are main development vectors of all nations and funds oriented in these fields are major capital investments, for which recent utilities are ignored in favor of future ones that are much more important due to their major effects on the ostensible growth of society's capabilities. The constant insufficiency of financing the health system requires the search of new resources and their much more responsible and efficient management. The clawback tax, which theoretically withdraws a surplus part from the sales value of pharmaceutical companies, given the fact that the paying availability is estimated according to the involved opportunity costs, is a fiscal instrument practiced by many countries with beneficial consequences on the social surplus. The three attempts (three normative acts in three years) of the Romanian national authorities to introduce the clawback tax may be considered failures, due to the absence of studies and tests that allow the implementation of accurate, sustainable and non-discriminatory rules and the highlight of compensatory measures. [ABSTRACT FROM AUTHOR]

The pharmaceutical products market has a major place in the field economy, raising numerous specific issues, seen from several points of view, from the producer to the distributor, from the doctor to the pharmacist, and last but not least, to the patient, the final but the most important link of this commercial chain aiming strictly at the whole population's health. The clawback tax has opened an extremely varied and controversial debates background, with considerable consequences at the different economic levels: government, medicines producers, retailers, pharmacies, patients. The authors present some aspects with regard to the pharmaceutical products market in Romania, in the light of the clawback tax and the issues it has generated. [ABSTRACT FROM AUTHOR]

The article focuses on the clawbacks of Zynga Inc., a social game services provider, as per which Zynga's employees, who have got too many stock options were demanded to return some of their options to the company or else they'll be fired. It suggests an alternative contractual arrangement through which employees can negotiate to restrict clawbacks and create an efficient work-compensation exchange, hence can retain the central pillar of business culture in Silicon Valley, California.

The article focuses on the inadvertent production of privileged information (IPPI) in discovery requests and a need to reform clawback agreements that failed to maintain attorney–client privilege (ACP) and work-product protection (WPP). It provides an overview of Federal Rule of Evidence (FRE) 502, which informs about IPPI amounts to a waiver of privileges. It also discusses Federal Rule of Civil Procedure, which deals with the rights and duties of parties who receive an IPPI.

In a variety of circumstances taxpayers may be required to repay amounts that represented taxable income to them in prior years. Tax was paid on this income in the year it was reported. The concern of taxpayers in this predicament becomes how to recover the previously paid tax and be restored to the financial position they held prior to receiving the income. Section 1341 of the tax code provides a unique opportunity to reduce repayment-year taxes by the amount of tax paid on this income in the prior year. As discussed herein, however, taxpayers may encounter myriad complications while trying to procure the benefits of Section 1341. [ABSTRACT FROM AUTHOR]

We investigate the degree to which including a clawback provision in executive compensation contracts is an effective governance mechanism by documenting the impact of clawback adoption on stock prices. We expect this ex post settling-up mechanism to be beneficial because it diminishes financial reporting risks. In support of our hypotheses, we find that the shareholders of adopting firms experience statistically significant positive stock-valuation consequences relative to propensity-score-matched control samples. Further, firms with previous financial restatements had the largest economic gains, suggesting that a clawback policy can be effective at curtailing incentives for earnings manipulation. Analysis of the bid-ask spread provides evidence that these provisions contribute to reducing financial reporting risk for restating firms, while non-restating firms experience no change in the spread. We find no evidence that clawback provisions entail costs in the form of higher CEO compensation following adoption nor do they influence the design of compensation contracts. [ABSTRACT FROM AUTHOR]

In the liquidation of a Ponzi scheme, investors--typically those who were "net winners" (i.e., investors who, over time, received more cash than they deposited)--may find themselves facing a lawsuit in the ensuing bankruptcy seeking to "claw back" all or some portion of their net winnings and sometimes even amounts representing "principal." In the Madoff bankruptcy, for instance, the trustee in charge of the liquidation proceedings filed over 1,000 lawsuits seeking to claw back funds from former customers. In September 2012 the IRS released guidance in the form of two FAQs posted on its website addressing the federal income tax treat- ment of clawback repayments of amounts previously reported as income from a Ponzi scheme. This article analyzes the application of the IRS's guidance to clawback repayments of net winnings and the need for future guidance regarding the tax treatment of claw- back repayments of principal. [ABSTRACT FROM AUTHOR]