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Browse: Home / 2009 / May / 18 / Options Backdating Cases Not Dead Yet

Options Backdating Cases Not Dead Yet

By Securities Docket on May 18, 2009, 3:50 pm

There were rumblings near the end of 2008 that the SEC’s interest in options backdating was winding down, but the last few days have seen a new surge in such cases.  On May 14, the SEC filed a settled backdating enforcement action against Gary A. Ray, the former VP of human resources at L.A.-based homebuilder KB Home, Inc.  Today, the SEC brought another backdating case against Monster Worldwide, Inc., for an alleged “multi-year scheme to secretly backdate stock options granted to thousands of Monster officers, directors and employees.”  The SEC announced that Monster agreed to pay a $2.5 million penalty to settle the SEC’s charges that the company defrauded investors by granting backdated, undisclosed “in-the-money” stock options while failing to record required non-cash charges for option-related compensation expenses.

The SEC’s alleges that as a result of this scheme, Monster materially overstated its quarterly and annual earnings in its financial statements and was required to restate its historical financial results for 1997-2005 in a cumulative pre-tax amount of approximately $339.5 million to record additional non-cash charges for option related compensation expenses.

Read the SEC’s Litigation Release

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Posted in SEC | Tagged Features, Options Backdating

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