The Daily Caveat is written by Michael Thomas, a recovering corporate investigator in the Washington, DC-area. [More]
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3/08/2009
Former KB Home CEO Faces Backdating Charges
9/14/2008
Apple Settles Backdating Lawsuit
Apple Off the Hook on Options
Backdating Concerns Rise from the Ashes for Apple
Broadcom Founder Plans Guilty Plea on Backdating Charges
Broadcom CEO Henry Nicholas: Life of the Party
5/18/2008
Backdating Litigation Brings Poor Payoffs to Plaintiffs?
Former Monster.com COO Faces Backdating Charges
Peregrine Systems Trial Reaches Second Hung Jury
Backdating Back in the Spotlight
KLA Backdating Case Reaches $65 Million Conclusion
Backdating Stings Former Monster CEO (Repeatedly)
Brocade's Gregory Reyes Denied New Trial
Things Looking Up for Brocade CEO, Reyes
Apple's Former General Counsel Comes Back Swinging
Settlement in Mercury Interactive Backdating Case
Backdating 2.0
9/10/2007
Judge Skeptical of Apple Backdating Suit
CNET Cleared by SEC on Backdating Charges 8/15/2007
Former KLA General Counsel to Face Backdating Charges
Federal prosecutors Move Against Financial Advisor of Broadcom Co-Founder
8/08/2007
Brocade Conviction Is First Successful Criminal Prosecution of Stock Option Backdating
Apple Backdating Investigation Turns Toward the BOD
Former Apple CFO Makes Deal, Tells Tales on Jobs
Former Engineered Support CFO Faces Backdating Fraud Indictment
Steve Jobs - Not Out of the Woods Yet
HP Stock Option Investigation Moves Forward
United Health Group to Restate $1.5 Billion
RIM Busted on Backdating - Will Restate $250 Million
Former McAfee GC Indicted on Stock Option Backdating Charges
LAW.COM Covers the Changing Nature of In-House Counsel
File Under Things You Wish You Hadn't Put in an Email: Mercury Interactive's "Magic Backdating Ink"
Running Out the Clock on Backdating Charges
Monster Lawyer Expected to Pleade Guilty in Stock Options Case
Steve Jobs and Stock Options...a Turning Point?
Federal Stock Options Backdating Investigative Team Loses Two
Apple Stock Option Class Action Has a Lead Plaintiff
Apple Facing Federal Probe on Stock Option Backdating
Why Steve Jobs Should Resign
Apple Stock Options Investigation - It's Not Over Yet
IBM Ditches Options for Directors in Favor of Cold Hard Cash
Ideoblog on Corporate Governance and Backdating
"Lucky Directors"
Home Depot - 25 Years of Stock Option Backdating?
Witness Systems CEO Resigns
Former KB Home CEO Faces Backdating Charges
Backdating. Quaint, right?
In the face of the Madoffs, Stanfords et. al. In the cold hard light of 2009 backdating seems downright kiddie pool way to defraud your shareholders. But punished it must be and Bruce Karatz, former CEO of KB Home, is facing 20 counts - with a potential (cough) 415 years in prison.
Another former KB exec, Garry Ray plead guilty a month ago to conspiring with Mr. Krantz to obstruct the SEC investigation into backdating at KB Homes. That can't be a terribly good sign for Krantz. Bloomberg has the rest.
-- MDT
In the face of the Madoffs, Stanfords et. al. In the cold hard light of 2009 backdating seems downright kiddie pool way to defraud your shareholders. But punished it must be and Bruce Karatz, former CEO of KB Home, is facing 20 counts - with a potential (cough) 415 years in prison.
Another former KB exec, Garry Ray plead guilty a month ago to conspiring with Mr. Krantz to obstruct the SEC investigation into backdating at KB Homes. That can't be a terribly good sign for Krantz. Bloomberg has the rest.
-- MDT
Labels: backdating, Bruce Karatz, Garry Ray, KB Home
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Apple Settles Backdating Lawsuit
Glad that this is out of the way so that Steve and Co. can make with the new laptops next month. My 1.5 Ghz Powerbook is getting a little long in the tooth.
-- MDT
7/10/2008
-- MDT
Labels: Apple, backdating, Steve Jobs
Apple Off the Hook on Options
At least when it comes to the Justice Department. Allegedly aggrieved investors may have other ideas. Me personally, I'm just excited for the iPhone 2.0 upgrade available on Friday.
-- MDT
7/02/2008
-- MDT
Labels: Apple, backdating, stock options
Backdating Concerns Rise from the Ashes for Apple
We'll see if they gain any more traction via this new civil suit. The last run through saw Apple jettison its general counsel, among others.
-- MDT
6/25/2008
-- MDT
Labels: Apple, backdating, Steve Jobs, stock options
Broadcom Founder Plans Guilty Plea on Backdating Charges
The Wall Street journal has suggested a 5 year probation and 12 million fine might be part of the deal Broadcom co-founder, Henry Samueli has struck with prosecutors. Federal cases are still pending against three other execs from the company in relation to stock option backdating irregularities.
-- MDT
6/08/2008
-- MDT
Labels: backdating, Broadcom, Henry Samueli, stock options
Broadcom CEO Henry Nicholas: Life of the Party
I find it utterly shocking (shocking, I say) that this piece of work managed to "lose" $2.2 billion.
-- MDT
Labels: backdating, Broadcom, class action, Henry Nicholas, SEC
Backdating Litigation Brings Poor Payoffs to Plaintiffs?
CFO.com has the quick and dirty details on a recent NERA study handicapping the success of stock option backdating litigation. You can find the full report right here, if your of a mind to check it out.
-- MDT
5/05/2008
-- MDT
Labels: backdating, stock options
Former Monster.com COO Faces Backdating Charges
James Treacy joins General Counsel Myron Olesnyckyj on the list of former Monster.com execs charged in the firm's 1997 to 2005 stock option backdating schemes. Squarely in the doesn't bode well for Treacy column is the fact that Olesnyckyj plead guilty in February of last year.
3/23/2008
Labels: backdating, James Treacy, Monster.com, Myron Olesnyckyj, stock options
Peregrine Systems Trial Reaches Second Hung Jury
Maybe they ought to just go for the physical challenge at this point?
Details on the (second) Peregrine mistrial right here.
-- MDT
2/25/2008
Details on the (second) Peregrine mistrial right here.
-- MDT
Labels: backdating, mistrial, Peregrine Systems
Backdating Back in the Spotlight
This time the attention is on remarkably well-timed spates of corporate giving. Get the details via Dealbreaker. Also note their new and, if I may say, much less hideously ugly site design. Kudos, guys. For more on the story, try this article at the exceedingly well designed Portfolio.com.
-- MDT
2/04/2008
-- MDT
Labels: backdating, corporate giving, Dealbreaker
KLA Backdating Case Reaches $65 Million Conclusion
The final figures aren't out but KLA has reportedly signed a letter of agreement to settle class action litigation brought against the firm in relation to a $935 million loss of market cap resulting from reports of stock option backdating.
Word of the looming settlement comes from a 10-Q statement KLA recently filed with the SEC. Lawyers in the case are calling this one of the biggest awards yet in backdating-related litigation.
This won't end the problems for KLA, which is still facing several shareholder derivative suit and multiple state and Federal investigations.
-- MDT
1/23/2008
Word of the looming settlement comes from a 10-Q statement KLA recently filed with the SEC. Lawyers in the case are calling this one of the biggest awards yet in backdating-related litigation.
This won't end the problems for KLA, which is still facing several shareholder derivative suit and multiple state and Federal investigations.
-- MDT
Labels: backdating, KLA-Tencor, settlement, stock options
Backdating Stings Former Monster CEO (Repeatedly)
Big day for accused stock option backdater and former Monster.com CEO, Andrew McKelvey:
A settlement with his former firm.
A deferred prosecution agreement with the New York DA.
And a big pay-out to the SEC.
I said a BIG day, not a good day. Sheesh.
-- MDT
1/10/2008
A settlement with his former firm.
A deferred prosecution agreement with the New York DA.
And a big pay-out to the SEC.
I said a BIG day, not a good day. Sheesh.
-- MDT
Labels: Andrew McKelvey, backdating, Monster.com, stock options
Brocade's Gregory Reyes Denied New Trial
This despite the fact that a major witness for the prosecution has recanted portions of her testimony. According to U.S. District Court Judge Charles Breyer, who made the call, the witness's statements would not have had an impact on the outcome of the trial. Reyes, you may recall, as the distinction of being the first executive to go to trial of improper accounting of stock option grants.
-- MDT
11/15/2007
-- MDT
Labels: backdating, Brocade, Gregory Reyes, stock options
Things Looking Up for Brocade CEO, Reyes
Gregory Reyes just had a good day.
The former Brocade CEO was recently convicted on charges relating to stock option backdating and since then his future had been looking, lets face it, on the bleak side. But that was before he got some reasonably good news from federal Judge Charles R. Breyer.
Breyer elected to delay Reyes' sentencing until after the conclusion of the trial Stephanie Jensen, the former Brocade head of human resources and an alleged co-conspirator. Several charges against Jensen were also dropped. All this is seen as an indication that Reyes expected 10-year plus prison terms might be shrinking.
More on the Reyes sentencing from Workforce Management.
-- MDT
11/06/2007
The former Brocade CEO was recently convicted on charges relating to stock option backdating and since then his future had been looking, lets face it, on the bleak side. But that was before he got some reasonably good news from federal Judge Charles R. Breyer.
Breyer elected to delay Reyes' sentencing until after the conclusion of the trial Stephanie Jensen, the former Brocade head of human resources and an alleged co-conspirator. Several charges against Jensen were also dropped. All this is seen as an indication that Reyes expected 10-year plus prison terms might be shrinking.
More on the Reyes sentencing from Workforce Management.
-- MDT
Labels: backdating, Brocade, Gregory Reyes, Stephanie Jensen, stock options
Apple's Former General Counsel Comes Back Swinging
Ousted and indicted former Apple General Counsel, Nancy Heinen is readying her defense against stock option backdating charges from the SEC. Apple dismissed Heinen when the SEC came calling on the company regarding questionable grants practices.
While Apple patriarch, Steve Jobs seemed to be at least momentarily in the cross-hairs (and many predicted his sort, swift downfall), it was Heinen along with a few other high level company employees who have ultimately faced repercussions.
In her defense Heinen is seeking financial records from fellow former Apple in-house attorney, Wendy Howell. Howell, also canned in the options mess, was the individual who actually wrote the questionable options grant to Steve Jobs. Howell has indicated she falsified the options grant under pressure from Heinen.
Heinen wants access to the documents to show that Howell was under considerable financial distress at the time, hoping to discredit her testimony. Howell has thusfar resisted the overtures of the Heinen defense team citing privacy concerns.
Heinen recently filed suit against her former co-worker in an effort to produce the documents. MacWorld UK has the details on the case of Heinen v. Howell.
-- MDT
10/16/2007
While Apple patriarch, Steve Jobs seemed to be at least momentarily in the cross-hairs (and many predicted his sort, swift downfall), it was Heinen along with a few other high level company employees who have ultimately faced repercussions.
In her defense Heinen is seeking financial records from fellow former Apple in-house attorney, Wendy Howell. Howell, also canned in the options mess, was the individual who actually wrote the questionable options grant to Steve Jobs. Howell has indicated she falsified the options grant under pressure from Heinen.
Heinen wants access to the documents to show that Howell was under considerable financial distress at the time, hoping to discredit her testimony. Howell has thusfar resisted the overtures of the Heinen defense team citing privacy concerns.
Heinen recently filed suit against her former co-worker in an effort to produce the documents. MacWorld UK has the details on the case of Heinen v. Howell.
-- MDT
Labels: Apple, backdating, Nancy Heinen, SEC, stock options
Settlement in Mercury Interactive Backdating Case
Lawfirm Labaton Sucharow has reached a $117.5 million settlement with the company.
--MDT
10/03/2007
--MDT
Labels: backdating, Labaton Sucharow, Mercury Interative, settlement, stock options
Backdating 2.0
October 10th might be an important date when it comes for forecasting SEC enforcement priorities for the new year. Last March SEC Directory of Enforcement, Linda Chatman Thomsen indicated that the commission was going to be looking in to irregularities in sanctioned 10b5-1 stock-trading plans for corporate executives.
Chatman Thomsen is scheduled to speak on October 10th at the National Association of Stock Plan Professionals in San Francisco and increased SEC attention to insider trading issues is certainly on a lot of minds.
Details via Financial Week.
And for some past comment on backdating from Chatman Thomsen, check out this October '06 statement from SEC.com.
-- MDT
Chatman Thomsen is scheduled to speak on October 10th at the National Association of Stock Plan Professionals in San Francisco and increased SEC attention to insider trading issues is certainly on a lot of minds.
Details via Financial Week.
And for some past comment on backdating from Chatman Thomsen, check out this October '06 statement from SEC.com.
-- MDT
Labels: 10b5-1, backdating, Linda Chatman Thomsen, SEC
1 Comments.
Song of Deborah
...They chose new gods; then was war in the gates... Awake, awake, Deborah: awake, awake, utter a song... the LORD made you have dominion over the mighty... Curse ye Meroz, said the angel of the LORD, curse ye bitterly the inhabitants thereof; because they came not to the help of the LORD, to the help of Justice against the mighty... Have they not divided the prey; to every man a damsel or two? So let all thine enemies perish, O LORD: but let them that love him be as the sun when he goeth forth in his might. And the land rest forty years. Judges 5.
Deborah Palfrey deserves the Pemberton Award for Clean Governance.
Palfrey list is like the Black Book of 1918.
That Trial of the century is deleted from all books.
The list there had 47000 names.
The list here has 46000 phone bills.
The listed are not womenizers, machos or ordinary sinners.
They are power brokers, gay lutheran shock n awe blitzkrieg agitators of all wars and all panics.
These wretches are one dirty cover to the real pimps deep undercover.
A curse on the kingpins, Justice Charles Darling then and Judge Adolph Kramer Kessler now.
Noel Pemberton-Billing
Trial of the Century 1918
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...They chose new gods; then was war in the gates... Awake, awake, Deborah: awake, awake, utter a song... the LORD made you have dominion over the mighty... Curse ye Meroz, said the angel of the LORD, curse ye bitterly the inhabitants thereof; because they came not to the help of the LORD, to the help of Justice against the mighty... Have they not divided the prey; to every man a damsel or two? So let all thine enemies perish, O LORD: but let them that love him be as the sun when he goeth forth in his might. And the land rest forty years. Judges 5.
Deborah Palfrey deserves the Pemberton Award for Clean Governance.
Palfrey list is like the Black Book of 1918.
That Trial of the century is deleted from all books.
The list there had 47000 names.
The list here has 46000 phone bills.
The listed are not womenizers, machos or ordinary sinners.
They are power brokers, gay lutheran shock n awe blitzkrieg agitators of all wars and all panics.
These wretches are one dirty cover to the real pimps deep undercover.
A curse on the kingpins, Justice Charles Darling then and Judge Adolph Kramer Kessler now.
Noel Pemberton-Billing
Trial of the Century 1918
Links to this post:
Judge Skeptical of Apple Backdating Suit
(In keeping with our iPhone theme...)
Justin Scheck at the LegalPad Cal Law blog has details...
-- MDT
9/06/2007
Justin Scheck at the LegalPad Cal Law blog has details...
-- MDT
Labels: Apple, backdating, Cal Law Blog, stock options
CNET Cleared by SEC on Backdating Charges 8/15/2007
Former KLA General Counsel to Face Backdating Charges
According to Law.com, by September 30 the SEC plans to file stock option backdating-related civil charges against Lisa Berry of KLA in connection with backdating irregularities at KLA-Tencor and Juniper Networks. Berry currently works for Tellme Networks.
For more on the Berry and KLA, check out Law.com.
-- MDT
8/10/2007
For more on the Berry and KLA, check out Law.com.
-- MDT
Labels: backdating, Juniper Networks, KLA-Tencor, Lisa Berry, stock options
Federal prosecutors Move Against Financial Advisor of Broadcom Co-Founder
Federal prosecutors have moved a step closer to Broadcom co-founder, Henry T. Nicholas III, filing criminal charges against California attorney Craig Steven Gunther, who spent several years managing Nicholas's personal finances.
The Gunther indictment doesn't specifically mention stock option backdating. Early in the year the company made a massive $2.5 billion restatement resulting from backdating irregularities (the original estimate was more like $704 million) and saw its CFO resign as a result of the issues.
More on the Gunther indictment via Reuters.
-- MDT
The Gunther indictment doesn't specifically mention stock option backdating. Early in the year the company made a massive $2.5 billion restatement resulting from backdating irregularities (the original estimate was more like $704 million) and saw its CFO resign as a result of the issues.
More on the Gunther indictment via Reuters.
-- MDT
Labels: backdating, Broadcom, Craig Steven Gunther, Gregory Reyes, Henry Nicholas, stock options
3 Comments.
It's Brocade, not Broadcom, where the former CEO was convicted. In addition, charges haven't been filed against Nicholas, as the LATimes story that you link to makes clear.
Colin is correctomundo.
Impending fatherhood has clouded my mind and dulled my blog-fu. We're due tomorrow so I am fairly well distracted.
I have humbly corrected the above post.
-- MDT
Impending fatherhood has clouded my mind and dulled my blog-fu. We're due tomorrow so I am fairly well distracted.
I have humbly corrected the above post.
-- MDT
Just browsing the internet, You have a very, very interesting blog.
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Brocade Conviction Is First Successful Criminal Prosecution of Stock Option Backdating
Gregory L. Reyes, former CEO Brocade Communications Systems, has achieved the dubious distinction of becoming the first executive to be convicted on criminal charges relating to improper stock option backdating disclosures. Sentencing for Reyes is obviously still to come (Npvember 21, if you are keeping score) but he could face as much as 20 years in prison. While some expressed surprise at the guilty verdict, it can't be a good omen for the 200+ other companies facing similar scrutiny and potential prosecution.
-- MDT
5/04/2007
-- MDT
Labels: backdating, Brocade, convicted, Gregory Reyes, stock options
Apple Backdating Investigation Turns Toward the BOD
With Steve Jobs, at this point, apparently not facing legal action for his role in Apple's stock option backdating kerfluffle, attention has turned to the Apple board and how it conducts itself. The board features a few folks you may have heard of including former Vice President, Al Gore and Google boss, Eric Shmidt.
The San Francisco Gate has the details.
-- MDT
4/25/2007
The San Francisco Gate has the details.
-- MDT
Labels: Apple, backdating, Fred Anderson, Steve Jobs, stock options
Former Apple CFO Makes Deal, Tells Tales on Jobs
Looks like Nacy Heinen and Fred Anderson - Apple's former general counsel and CFO, respectively - are coming out swinging. So far Heinen and Anderson are the only two Apple execs to take a public fall for the company's stock option backdating, but both may still have a great deal to say about the role of Apple CEO Steve Jobs.
Official charges against Heinen are expected from the SEC as soon as this week. She has vowed to fight. Anderson, on the other hand, has cut a deal with the SEC - paying $3.5 million to settle backdating-related charges against him.
More on all the schenanigans from Palo Alto, via the FT - here and here.
-- MDT
3/27/2007
Official charges against Heinen are expected from the SEC as soon as this week. She has vowed to fight. Anderson, on the other hand, has cut a deal with the SEC - paying $3.5 million to settle backdating-related charges against him.
More on all the schenanigans from Palo Alto, via the FT - here and here.
-- MDT
Labels: Apple, backdating, corporate scandal, Fred Anderson, Nancy Heinen, SEC, stock options
Former Engineered Support CFO Faces Backdating Fraud Indictment
Gary Gerhardt, former chief financial officer for Missouri-based defense contractor, Engineered Support Systems has been indicted on ten counts of fraud related to the backdating of ESS stock options. The alleged backdating irregularities took place between 1996 and 2002. ESS's former controller, Steven Landmann previously plead guilty to cooking the books.
More here on the ESS indictment, via the St. Louis Business Journal.
You also might want to check out the SEC's Feb '07 injunctive order against Gerhardt and Landmann
-- MDT
3/26/2007
More here on the ESS indictment, via the St. Louis Business Journal.
You also might want to check out the SEC's Feb '07 injunctive order against Gerhardt and Landmann
-- MDT
Labels: backdating, Engineered Support Systems, Gary Gerhardt, Steven Landmann, stock options
Steve Jobs - Not Out of the Woods Yet
This San Francisco Chronicle article does a good job of laying why Jobs should still be sweating (if only in private) his 2001 stock option grants. Jobs has already passed through one options investigation untouched, that of, Pixar the animation house he bought of George Lucas for a song and then turned into a creative powerhouse.
But backdating issues with Jobs's gig at Apple, Inc. still loom large. There's a lot of smoke and maybe a bit of fire too. After all it would seem fortuitous for Job's to have accepted options backdated to just four days before Apple made the announcement of its first iPod...until you recall that the iPod was widely derided as a flop-in-the-making.
The Daily Caveat thinks Jobs'll skate...but time will tell.
-- MDT
3/12/2007
But backdating issues with Jobs's gig at Apple, Inc. still loom large. There's a lot of smoke and maybe a bit of fire too. After all it would seem fortuitous for Job's to have accepted options backdated to just four days before Apple made the announcement of its first iPod...until you recall that the iPod was widely derided as a flop-in-the-making.
The Daily Caveat thinks Jobs'll skate...but time will tell.
-- MDT
Labels: Apple, backdating, Steve Jobs, stock options
HP Stock Option Investigation Moves Forward
The HP pretexting debacle is barely cold but the maker of those printer cartridges that always seem to fail on nice round page numbers has another problem on the horizon, and a familiar one at that. HP has received notice from the U.S. senate, which is seeking the company's help in gaining a deeper understanding of Mercury Interactive's stock option irregularities. HP knew about MI's backdating issues when it purchased the company back in July 2006 but assured investors it was no big deal. Click here for more on HP's legal outlook.
-- MDT
3/07/2007
-- MDT
Labels: backdating, HP, Mercury Interative, pretexting, stock options
United Health Group to Restate $1.5 Billion
United Health disclosed last year that they would have some 'splainin to do regarding their stock options grants. The announcement was accompanied by the resignation of CEO, William McGuire. While and SEC investigation is still pending, the company has adjusted its accounting to correct the price of the questionably dated options, effectively eliminating the backdating. Further details here on United Health Group's restatement.
-- MDT
3/06/2007
-- MDT
Labels: backdating, SEC, stock options, United Health Group
RIM Busted on Backdating - Will Restate $250 Million
Research in Motion, maker of the ever-popular B(c)rackberry line of hand-helds saw its co-chief executive, Jim Balsillie, resign from his position yesterday when the company went public with an acknowledgment that RIM had made some very expensive errors when it comes to properly accounting for its stock options grants.
Balsillie will not leave the company, however. He'll remain and retain all other titles and executive privileges. RIM will end up restating earnings from 2004 through the first quarter of '07. Balsillie along with company co-Founder Mike Lazaridis will both kick in millions of their own personal cash to help make-up the shortfall.
-- MDT
2/28/2007
Balsillie will not leave the company, however. He'll remain and retain all other titles and executive privileges. RIM will end up restating earnings from 2004 through the first quarter of '07. Balsillie along with company co-Founder Mike Lazaridis will both kick in millions of their own personal cash to help make-up the shortfall.
-- MDT
Labels: backdating, crackberry, RIM, stock options
Former McAfee GC Indicted on Stock Option Backdating Charges
Kent Roberts got the boot from computer security software maker, McAfee about nine months ago when it came to light that Roberts had misled both the SEC and McAfee itself regarding his handling of stock options grants. Roberts is now facing seven criminal fraud counts in relation to his actions.
The McAfee case is one of the longer running of the backdating-related cases the SEC is currently pursing. The options grants in question go back to 2000. McAfee has already paid a $50 million fine to the SEC and is ultimately expected to see a financial restatement in the range of $100-150 million. Roberts, if convicted to do up to twenty years and pay up to $5 million in fines.
More on the Kent Roberts indictment via Mercury News.
-- MDT
2/23/2007
The McAfee case is one of the longer running of the backdating-related cases the SEC is currently pursing. The options grants in question go back to 2000. McAfee has already paid a $50 million fine to the SEC and is ultimately expected to see a financial restatement in the range of $100-150 million. Roberts, if convicted to do up to twenty years and pay up to $5 million in fines.
More on the Kent Roberts indictment via Mercury News.
-- MDT
Labels: backdating, general counsel, indictment, Kent Robert, McAfee, SEC, stock options
LAW.COM Covers the Changing Nature of In-House Counsel
Typical great stuff from Law.com, this one a piece from Susan F. Friedman and the New York Law Journal. Friedman is a senior vice president of the Employed Lawyers Product Practice of Marsh. Not shockingly she recommends good insurance. But good corporate governance, that's important too. Read on.
-- MDT
2/22/2007
-- MDT
Labels: backdating, corporate governance, general counsel, stock options, Susan Friedman
File Under Things You Wish You Hadn't Put in an Email: Mercury Interactive's "Magic Backdating Ink"
It can be hard to protest one's innocence when your company is being pursued by regulators for stock option backdating irregularities and some pesky investigator turns up internal company emails with executives talking about "magic backdating ink." Hmmm... I wonder if the feds will show the Mercury Interactive executive team that magical white collar correctional facility? Details (coincidentally) at The Mercury News.
Take note of the quote-love for Mr. Peter Henning, Wayne State business law professor and friend of The Daily Caveat (Peter and I we share a fondness for the exploits of former Louisiana governor, felon and all around colorful character, Edwin Edwards).
You should already be reading Peter's fine White Collar Crime Prof blog, co authored with Ellen Podgor. You'll find more of Peter's recent comments on Mercury Interactive right here.
-- MDT
2/20/2007
Take note of the quote-love for Mr. Peter Henning, Wayne State business law professor and friend of The Daily Caveat (Peter and I we share a fondness for the exploits of former Louisiana governor, felon and all around colorful character, Edwin Edwards).
You should already be reading Peter's fine White Collar Crime Prof blog, co authored with Ellen Podgor. You'll find more of Peter's recent comments on Mercury Interactive right here.
-- MDT
Labels: backdating, email, Mercury Interative, Peter Henning, stock options
Running Out the Clock on Backdating Charges
With a five year window for action on stock options backdating prosecutions, time is of the essence for regulators. With more than 150 firms under potential investigation and countess stones unturned. Some of the highest profile cases are nearing the end of that window, Brocade for example. Of course, the government can always ask potential defendands to give them more time...I'm sure they'd be willing.
Maybe...
-- MDT
2/15/2007
Maybe...
-- MDT
Labels: backdating, Brocade, prosecution, stock options
Monster Lawyer Expected to Pleade Guilty in Stock Options Case
Myron Olesnyckyj, former general counsel for jobsite, Monster.com is expected to plead guilty in relation to the stock options lawsuit filed by regulators against his former firm. Olesnyckyj (say it ten times fast - hell, say it once!) cut a deal with prosecutors that will see him testify against his former boss, Andrew McKelvey, Monster.com's founder and former CEO.
We've already seen a wave of GCs quietly or quite publicly dumped by firms under investigation by the SEC in relation to stock option backdating irregularities. How many will flip, like Olenyckyj, to testify against their former bosses...time will tell.
-- MDT
1/26/2007
We've already seen a wave of GCs quietly or quite publicly dumped by firms under investigation by the SEC in relation to stock option backdating irregularities. How many will flip, like Olenyckyj, to testify against their former bosses...time will tell.
-- MDT
Labels: backdating, homeland security, Monster.com, stock options
Steve Jobs and Stock Options...a Turning Point?
There are certainly plenty of business medial pundits out there that have weighed in on the stock options backdating with their contention that imbroglio is much ado about nothing. And yet 160 some odd companies are either currently under or facing potential federal investigation and executives have been dropping right and left.
Heck, one guy even fled the country and initiated an international man-hunt.
One of the most prominent options inquiries has been that of Apple Computer (excuse me...Apple, Inc.) and CEO, Steve Jobs. It looked as if Jobs might skate initially because he essentially grew no benefit from the options that were awarded him. Apple's own internal investigation cried no harm no foul and it seemed that the story might just fade away into the din and roar preceding the much anticipated debut of Apple's iPhone.
But the story didn't quite die there. Just when the Apple options issue seemed to be dying down, it was brought roaring back to life by the admission that the minutes of the meeting where Jobs' stock options were granted had been falsified - that no board approval of the grant had taken place. Apple must have known that there was more to in because the quietly fired the execs involved, including long time general counsel, Nancy Heinen and Apple CFO Fred Anderson.
This prompted some to call for Steve Jobs resignation, although no one within Apple itself, notably. And that kind of standing by your man is what Peter Burrows over at BusinessWeek would like us to think of as The Steve Jobs Effect.
And he thinks its catching....
1/25/2007
Heck, one guy even fled the country and initiated an international man-hunt.
One of the most prominent options inquiries has been that of Apple Computer (excuse me...Apple, Inc.) and CEO, Steve Jobs. It looked as if Jobs might skate initially because he essentially grew no benefit from the options that were awarded him. Apple's own internal investigation cried no harm no foul and it seemed that the story might just fade away into the din and roar preceding the much anticipated debut of Apple's iPhone.
But the story didn't quite die there. Just when the Apple options issue seemed to be dying down, it was brought roaring back to life by the admission that the minutes of the meeting where Jobs' stock options were granted had been falsified - that no board approval of the grant had taken place. Apple must have known that there was more to in because the quietly fired the execs involved, including long time general counsel, Nancy Heinen and Apple CFO Fred Anderson.
This prompted some to call for Steve Jobs resignation, although no one within Apple itself, notably. And that kind of standing by your man is what Peter Burrows over at BusinessWeek would like us to think of as The Steve Jobs Effect.
And he thinks its catching....
Labels: Apple, backdating, Comverse, Fred Anderson, Kobi Alexander, Nancy Heinen, Steve Jobs, stock options
Federal Stock Options Backdating Investigative Team Loses Two
U.S. Attorney Kevin Ryan dropped out of the game last week and Lead Prosecutor Christopher Steskal has also opted to leave for a gig with lawfirm Fenwick and West.
By way of fond adieu to Ryan, check out this interview as well as this Law.com article which may give some insight into why Ryan's departure was " a mutually agreeable decision with Washington." Also, check out Fenwick's welcome aboard note touting their acquisition of Chris Steskal.
Eleven U.S. Attorneys have resigned in the last year...practically dropping like flies. Why you ask?
Well...there are theories.
-- MDT
1/24/2007
By way of fond adieu to Ryan, check out this interview as well as this Law.com article which may give some insight into why Ryan's departure was " a mutually agreeable decision with Washington." Also, check out Fenwick's welcome aboard note touting their acquisition of Chris Steskal.
Eleven U.S. Attorneys have resigned in the last year...practically dropping like flies. Why you ask?
Well...there are theories.
-- MDT
Labels: backdating, Christopher Steskal, Fenwick and West, Kevin Ryan, stock options
Apple Stock Option Class Action Has a Lead Plaintiff
The New York City Employees' Retirement System has the honors. And in related news, has Steve Jobs been meeting with the Feds?
-- MDT
1/17/2007
-- MDT
Labels: Apple, backdating, class action, securities, stock options
Apple Facing Federal Probe on Stock Option Backdating
I guess they're not just going to take Apple's word for it, huh?
-- MDT
1/08/2007
-- MDT
Labels: Apple, backdating, investigation, stock options
Why Steve Jobs Should Resign
Well, lets be clear, I don't think he should. But over at Institutional Risk Analytics they're makin' a case. Personally I can't see any way that Job's resigning from Apple hurts the company less than simply weathering the options scandal. To read the case against Steve Jobs, just click here.
-- MDT
12/27/2006
-- MDT
Labels: Apple, backdating, stock options
Apple Stock Options Investigation - It's Not Over Yet
It pains me to even think bad thoughts about the fine folks at Apple. This is a company whose products I've used since their earliest incarnations and have great affection for (my wife would say too great). I also think that Apple, by in large, acts pretty responsibly as a corporate citizen. Not saying they are perfect, but especially with Steve Jobs in the driver's seat the company expresses a vision and ethos of progress and refinement. These are things I can get behind, whether we're talking about technology or civil society. Thus it pains me to observe that Apple may be in deeper waters than it was originally thought when it comes to potential problems arising from stock option backdating.
Some prominent (and probably pre-emptory) resignations have already taken place, including that of former Apple General Counsel, Nancy Heinen and former Apple CFO Fred Anderson. Everybody across the board has lawyered up, including Apple itself. With an SEC investigation of the company still looming, this Mac addict is starting to sweat...just a little. Falsified documents will do that to ya.
Read the absolute latest from the FT.
-- MDT
12/22/2006
Some prominent (and probably pre-emptory) resignations have already taken place, including that of former Apple General Counsel, Nancy Heinen and former Apple CFO Fred Anderson. Everybody across the board has lawyered up, including Apple itself. With an SEC investigation of the company still looming, this Mac addict is starting to sweat...just a little. Falsified documents will do that to ya.
Read the absolute latest from the FT.
-- MDT
Labels: Apple, backdating, stock options
IBM Ditches Options for Directors in Favor of Cold Hard Cash
Comment here from Eric Jackson's "Breakout Performance" blog, as well as the full text of the WSJ article detailing IBM's reasons for the change....
-- MDT
12/21/2006
-- MDT
Labels: backdating, Breakout Performance, directors, Eric Jackson, IBM, stock options
Ideoblog on Corporate Governance and Backdating
If you are not already stopping by Ideoblog on a regular basis, you should consider adding it to your weekly web trawlings. University of Illinois College of Law professor, Larry Ribstein bangs the drum over there regarding all manner of good stuff. I don't always agree with his conclusions, but I sure do like reading his stuff. You'll find a link to the Ideoblog homepage under the Legal tab in the links section, stage right. Or you could just click on through to read Mr. Ribstein's most recent comments on the whole stock option backdating shebang.
-- MDT
12/18/2006
-- MDT
Labels: backdating, Ideoblog, stock options
"Lucky Directors"
It is not just corporate executives who have been benefiting from backdated stock option grants. According to a newly released Harvard Law School study, some 1,400 company directors have also reaped the rewards of the practice. Read the full report here.
-- MDT
12/11/2006
-- MDT
Labels: backdating, directors, harvard law school, stock options
Home Depot - 25 Years of Stock Option Backdating?
Witness Systems CEO Resigns
Stock option questions to blame. The company has just released the results of investigations into their stock options granting process dating back to February 2000.
More here.
-- MDT
More here.
-- MDT
Labels: backdating, david gould, stock options, witness systems
