No Implied Private Right of Action under SOX 304

In re Digimarc Corp. Derivative Litigation, --- F.3d ---, (9th Cir.(Or.) Dec 11, 2008) (NO. 06-35838)

In a derivative action, shareholders alleged that current and former officers and directors of Digimarc breached their fiduciary duties to the corporation and its shareholders by issuing misleading financial statements and misrepresenting the business and prospects of Digimarc in violation section 304 of the Sarbanes-Oxley Act, 15 U.S.C. § 7243. In agreement with other circuits that had considered the question, the Ninth Circuit held that there is no private right of action under section 304. Only the government can bring the action.