Settle sec mercury backdating
Two examples from the inventory of option backdating cases brought last year illustrate the approach of the Commission in some, but not in all cases. Finally, while most option backdating cases are based on conduct involving scienter, in some instances the Commission has based its claims on negligence as in , Civil Acton No. Mercury's former CEO, CFO, and General Counsel actively participated in and benefited from the options backdating scheme, which came at the expense of Mercury shareholders and the investing public.The SEC also sued former KLA-Tencor chief executive Kenneth Schroeder, accusing him of repeatedly engaging in options backdating after becoming CEO in 1999 - including pricing large options awards to himself that allowed him to reap millions of dollars in windfalls never disclosed to the company's shareholders.
The Silicon Valley company neither admitted nor denied the SEC's allegations but did agree to refrain from future violations of the securities laws.Essentially, they involve fraudulently backdating stock option grants so that they are in the money and then not recording the related expenses of those options properly in financial statements. To conceal these practices, grant documents were falsified. This action was brought against the former chairman and CEO of KB Home, Inc. Karatz engaged in a multi-year scheme to backdate stock options for himself and others at the company. Karatz used hindsight to pick advantageous grant dates according to the complaint. Karatz receiving a total of 2,860,000 shares of KB Home stock which yielded million when exercised. Karatz consented to the entry of a permanent injunction prohibiting future violations of the antifraud, reporting and proxy provisions of the federal securities laws.In many instances, these cases also involve disclosure violations. 27, 2007) (former general counsel of Mac Afee acquitted of fraud charges based on option backdating, but jury hung on charges regarding falsification of books and records which judge recommended government drop). The case was resolved with the company consenting to the entry of a permanent injunction prohibiting future violations of the antifraud, reporting and proxy provisions of the federal securities laws. In addition, he agreed to the entry of an order requiring him to pay approximately .7 million in disgorgement and interest and a civil penalty of 0,000. Karatz is also bared from service as an officer or director of a public company for five years.July 26, 2007 (Associated Press) WASHINGTON - Computer chip supplier KLA-Tencor Corp.on Wednesday became the third company to settle federal allegations of improper backdating of stock options, after being accused by regulators of concealing more than 0 million in compensation to executives and employees.