You Thought Backdating Was On The Back Burner?
James Treacy, former chief operating officer and president of online job board Monster Worldwide, has been charged with securities fraud and conspiracy in connection with the backdating of millions of dollars worth of employee stock options, the U.S. Attorney’s Office for the Southern District of New York announced Wednesday.
Google Caught in Pixar’s Backdating Fallout
There’s trouble a-brewing in Big Rock Candy Mountain View. Google (Nasdaq: GOOG) director Ann Mather could face a lawsuit over backdated stock-option grants she approved in her time as CFO of Pixar.
The SEC has “advised” Mather that there’s a civil action coming over yonder mountain, sure as the day is bright. The problem involves option grants to Pixar staffers like Toy Story director John Lasseter, who got a million Pixar options at a favorable, three-month-old price in 2001. All of this happened way before Ms. Mather joined the Google board, while Pixar was an independent and publicly traded company under chairman and majority shareholder Steve Jobs, of Apple (Nasdaq: AAPL) fame and fortune.
Apple, of course, has had its own run-ins with the SEC over option grants. The boards and internal investigation teams at both Pixar owner Disney (NYSE: DIS) and Apple have concluded that we shouldn’t blame The Turtlenecked One for these option-related problems — which shifts the burden to the CFOs and legal teams at the time. Hello, Ms. Mather…
Broadcom Corp. agreed to pay $12 million to settle Securities and Exchange Commission charges it falsified its reported income by backdating stock-option grants over a five-year period. The company restated its financial results in January 2007 and reported more than $2 billion in additional compensation expenses, one of the largest such restatements to date arising from stock-option backdating, according to the SEC.
Federal prosecutors in Los Angeles are weighing criminal charges against former and current company officials, people familiar with the matter said. In November, former Broadcom human-resources executive Nancy Tullos pleaded guilty to one count of obstructing justice. Earlier this year, she paid a fine to settle SEC civil charges, without admitting or denying the allegations…
In April 2008 we delivered a Notice of Arbitration and Arbitration Claim to our former independent registered public accounting firm, E&Y, and certain related parties. The arbitration relates to the issues that led to the restatement of Broadcom’s financial statements for the periods from 1998 through March 31, 2006 as disclosed in an amended Annual Report on Form 10-K/A for the year ended December 31, 2005 and an amended Quarterly Report on Form 10-Q/A for the three months ended March 31, 2006, each filed with the SEC January 23, 2007. Formal arbitration proceedings have not yet commenced.
Of all the companies caught up in the backdating mess, Brocade Communications has been especially hard hit — with both its CEO and a human resources exec going down in the scandal. But now responsibility for Brocade’s stock options backdating could ripple out as far as its law firm. A shareholder derivative suit filed recently in California district court names Wilson Sonsini, accusing the law firm of malpractice for blessing backdating at Brocade…
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