Gary A. Ray, a former Vice President and head of Human Resources at KB Home Corp., has agreed to plead guilty to a conspiracy in 2006 to obstruct justice in connection with an internal investigation into stock option backdating at KB. The United States Attorney’s Office for the Central District of California announced today that Ray agreed to plead guilty to conspiring with the CEO to impede and obstruct a contemplated investigation by the SEC into stock option backdating at the company.
According to the US Attorney’s office, Ray has admitted that he and the CEO agreed that they would collaborate in causing KB’s general counsel to prepare and to submit a false and misleading report on KB’s historical option granting practices to KB’s Audit Committee and other KB managers. Ray is subject to a statutory maximum sentence of five years of imprisonment.
