Stock option scandal
The chief executives of McAfee Charts and CNET Charts both resigned Wednesday, the latest fallout in the growing scandal over the timing of stock option grants. Some firms have been linked to the stock options scandal, from blue-chip companies like Home Depot Charts and Apple Computer to a slew of smaller tech firms.
There are no signs at this stage of that waning," said Michael Koenig, an attorney at the Washington office of law firm Dewey Ballantine. Stock options give executives and employees the right to buy shares at a certain price, and if the stock rises after the options are granted, profits can be fat.
Federal prosecutors and the Securities and Exchange Commission are investigating whether companies "backdated" or otherwise manipulated the dates they granted stock options to make them more lucrative. The former CEOs of Brocade Communications Charts and Comverse Technology Charts are both facing criminal and civil charges for their role in manipulating options.
Many of the companies involved have opened internal investigations, while others are restating results, which can mean a big hit to profits. How the companies manage the external and internal probes - and communicate with regulators and investors - can play a big role in cutting the risk to the firms themselves, and their shareholders.
Come clean, and do it early. A lot of people involved in the backdating mess probably think not they're going to get caught, but that's a calculated risk they're taking, according to Erik Lie, an associate professor of finance at the University of Iowa whose research first cast options backdating into the spotlight. With the list of companies hit by the options saga growing - and Lie expects the number of companies involved to grow to at least a couple of hundred - it's a good idea to get ahead of an investigation.
Reshuffle management, as needed. Whether the CEO goes depends on what they did, according to Charles Elson, the director of the Center for Corporate Governance at the University of Delaware. Companies need to act effectively according to the results of their investigations and put procedures in place to make sure it doesn't happen again, he added. If someone intentionally backdated options with the intent to take a gain improperly, they're not the best steward of shareholder assets," he said.
The more open a company is about the situation, the more information investors have to evaluate whether any backdating that occurred was the work of a few isolated individuals at the company or is more widespread, or even was done with the knowledge of senior management, according to John Mutch, founder of the shareholder activist hedge fund MV Advisors. The less a company has to hide, the better, he said, giving the example of Apple Chartswhich initiated its own investigation into stock options.
Apple shares slipped after the company announced its internal investigation in June but have since recovered. In fact, the stock is up about 24 percent since it launched its internal probe on June Even though several companies have launched internal probes, they may not escape the scrutiny of government investigators. If a company comes under investigation by the SEC, executives should plan on cooperating fully, said Koenig from Dewey Ballantine.
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By Grace WongCNNMoney. Stock options saga Company Ticker Investigations underway Charge or restatement Actel Corp. ACTL Internal -- Activision Inc ATVI SEC -- Affiliated Computer ACS SEC, DOJ May restate Affymetrix Inc. AFFX Internal Restate Agile Software Corp. AGIL Internal -- Altera Corp. ALTR SEC, DOJ Restate Alkermes Inc. ALKS SEC -- American Tower Corp. AMT SEC, DOJ May restate Amkor Technology AMKR Internal Restate Analog Devices Inc.
End of the Options Backdating Era - The New York Times
ADI SEC, DOJ -- Apple Computer Inc. AAPL SEC May restate Applied Micro Circuits AMCC SEC Mafia 2 make money quick Arbinet ARBX Internal Restate ArthroCare Corp. ARTC SEC -- Aspen Technology Inc AZPN Internal Restate Asyst Technologies ASYT SEC, DOJ Restate Atmel Corp.
ATML SEC -- Autodesk Inc. CA Internal Restate Cablevision Systems CVC SEC, DOJ Restate Caremark Rx Inc.
"Stock Option Scandal": Andrews Kurth Kenyon LLP
CMX SEC, DOJ -- CEC Entertainment Inc CEC SEC -- Ceradyne Inc. CRDN Internal -- Cheesecake Factory CAKE SEC Restate Children's Place PLCE Internal -- Chordiant Software CHRD SEC -- Clorox Co.
CNET SEC, DOJ Restate Crown Castle Int'l CCI Internal -- Cyberonics Inc.
CYBX SEC, DOJ -- Delta Petroleum Corp DPTR SEC, DOJ -- Dot Hill Systems Corp HILL Internal -- EPlus Inc. PLUS Internal Restate Electronic Arts Inc. ERTS SEC -- Equinix Inc. EQIX Stock option scandal, DOJ -- Extreme Networks EXTR Internal -- F5 Networks FFIV SEC, DOJ Restate First American Corp.
FAF Internal -- Foundry Networks FDRY SEC, DOJ Restate Fresenius Medical FMS DOJ -- GlenAyre Technologies GEMS Internal -- HCC Insurance HCC SEC -- Home Depot Inc. HD SEC -- iBasis Inc. IBAS Internal -- Intuit Inc. INTU SEC, DOJ -- Integrated Silicon ISSI Internal -- I2 Technologies ITWO Internal Possible charge Jabil Circuit Inc.
JBL SEC, DOJ -- Juniper Networks Inc.
JNPR DOJ Restate from J2 Global JCOM Internal -- KB Home KBH SEC -- Keithley Instruments KEI SEC -- KLA-Tencor Corp. MVSN SEC, DOJ -- Marvell Technology MRVL SEC, DOJ -- Maxim Integrated MXIM SEC, DOJ -- McAfee Inc. MFE SEC, DOJ May restate Meade Instruments MEAD SEC -- Medarex Inc.
MEDX SEC, DOJ May restate Mercury Interactive MERQ Wells Notice Restate Michaels Stores Inc. MIK SEC, DOJ -- MicroIslet Inc.
MII Internal -- Microtune Inc. TUNE Internal -- MIPS Technologies Inc MIPS Internal -- Moldflow Corp. MFLO Internal -- Molex MOLX SEC, DOJ -- Monster Worldwide Inc MNST SEC, DOJ -- Nephros Inc. NEP Internal Restate Q1 Novell Inc.
NOVL Internal -- Nyfix Inc. NYFX DOJ -- Nvidia Corp.
NVDA Internal -- Openwave Systems Inc OPWV SEC, DOJ -- Pediatrix Medical PDX Internal -- PMC-Sierra Inc. PMCS Internal -- Pool Corp. POOL Internal -- Power Integrations POWI SEC, DOJ May restate Progress Software PRGS SEC Restate Quest Software Inc. QSFT SEC Restate QuickLogic Corp. QUIK SEC -- Rambus Inc. RSAS SEC, DOJ -- SafeNet Inc.
SFNT SEC, DOJ Restate Sanmina-SCI Corp. SANM SEC Restate ScanSource Inc. SCSC Internal -- Semtech Corp SMTC SEC, DOJ Restate Sepracor Inc. SEPR SEC Restate Sharper Image Corp. SHRP Internal Restate Shaw Group Inc. SGR Internal -- Sigma Designs SIGM SEC -- Sonus Networks Inc. SONS Internal -- Sunrise Telecom Inc.
Stock options scandal - ditycapylal.web.fc2.com
SRTI Internal Restate Sycamore Networks Inc SCMR SEC, DOJ Restate Take-Two Interactive TTWO SEC -- Tetra Tech Inc. TTEK Internal -- THQ Inc. THQI SEC -- Trident Microsystems TRID SEC, DOJ -- Ulticom Inc. ULCM SEC Restate UnitedHealth Group UNH SEC,DOJ,IRS May restate Valeant Pharmaceutical VRX SEC -- Verint VRNT SEC -- VeriSign Inc.
VRSN SEC, DOJ -- ViaSat Inc. ZRAN SEC, DOJ -- Source: Reuters 1 Criminal, civil charges filed against ex-Brocade executives on July SAVE EMAIL PRINT REPRINT.
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