Although [the controller] may have made the appropriate recommendations to his corporate supervisors, when those recommendations were rejected, [he] acted as the “good soldier,” implementing their directions which he knew or should have known were improper.
The SEC’s refusal to recognize the “good soldier” defense as a valid justification for questionable conduct by mid-level corporate executives was debated by the business press following the public disclosure of the Oak Industries fraud. Most parties who commented on this issue supported the SEC’s position.However, one individual warned, “It’s unrealistic to place a burden on mid-level [corporate] managers to dis charge obligations that they’re not in a position to discharge.”