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Monday, 12 May 2008
 
 

Ignorance Can Lead to CEO Lawsuits

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Ignorance Can Lead to CEO Lawsuits

The federal government continues to pressure executives that fail to add stakeholder value while amassing personal wealth, sending a strong precautionary signal to other executives. The two executive in the best position to recognize the financial conditions as Kmart was heading rapidly toward bankruptcy, CEO Chuck Conaway and CFO John McDonald, are being held accountable by the Securities and Exchange Commission (SEC). The SEC feels the pair made statements that indicated the company's financial difficulties were not as dire as they actually were in the period just prior to the company's January 22, 2002 Chapter 11 filing.
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