U.S. companies forced to correct accounting failures would haveto reclaim a portion of bonuses awarded to corporate bosses under arule proposed Wednesday by the Securities and Exchange Commission(SEC).

The SEC measure, passed on a 3-2 vote, would expand thecircumstances under which executives could be punished if theirfirms restate past earnings. Companies would have to claw backstock or cash bonuses based on erroneous results even if it wasn'tintentional.

"Executive officers should not be permitted to retain incentive-based compensation that they should not have received in the first instance." --Mary Jo White, Chair, SECThechange would build on rules—approved more than a decade ago inresponse to fraud at Enron Corp. and WorldCom Inc.—that permittedclawbacks only when it could be shown that books were cookedintentionally.

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