A federal judge has thrown out the SEC’s stock option backdating case against Michael F. Shanahan Jr. According to the St. Louis Post-Dispatch, U.S. District Judge Jean C. Hamilton ruled on Friday that the SEC failed to present enough evidence to show that Shanahan Jr., the son of the former CEO and co-founder of Engineered Support Systems Inc., misled investors with respect to ESSI’s stock option plan.
The SEC claimed that Shanahan Jr. was in a unique position to know about the alleged backdating because he was a member of the directors’ compensation committee.
The Post-Dispatch reports that former CEO and co-founder of ESSI, Michael Shanahan Sr., former CFO Gary Gerhardt and former Controller Steven Landmann each pleaded guilty to one criminal charge. Gerhardt was sentenced to 15 months in federal prison, while Shanahan Sr. and Landmann received probation.