• SEC Brings First Proceeding under S-Ox Loan Prohibition
  • January 3, 2006 | Authors: Ellen S. Friedenberg; John K. Hoyns; Gloria W. Nusbacher
  • Law Firm: Hughes Hubbard & Reed LLP - New York Office
  • The SEC recently brought its first administrative proceeding under the Sarbanes-Oxley provision that prohibits personal loans to directors and executive officers of public companies. In In the Matter of Peter Goodfellow and Stamatis Molaris, the SEC imposed a cease-and-desist order on two former officers of a foreign issuer who, while employed by the company, had caused it to grant each of them a short-term, interest-free loan. The officers tried to argue that the payments were merely "advances", but, according to the SEC, the statute "contains no exception for 'advances' and draws no distinction between 'advances' and loans."