What To Do About Plan Loans and SOX?

The Sarbanes-Oxley Act of 2002 (SOX), enacted last year in response to well-publicized corporate scandals such as Enron and WorldCom, prohibits "personal loans" by public companies to directors and executive officers. This provision of hte law has raised a number of troublking issues, including whether SOX prohibits executive officers from borrowning from their accounts in their company's 401(k) or other tax-qualified retirement plan.

Seyfarth Shaw LLP provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act upon this information without seeking advice from their professional advisers.