January 29, 2008
A sentencing scorecard on backdating convictions
This new Reuters article, which reports on the latest sentencing following a conviction for options backdating, also provides this effective review of the outcomes in a series of backdating conviction:
A former chief financial officer of information security company SafeNet Inc was sentenced on Monday to six months in prison for manipulating employee stock option grants. Carole Argo also was fined $1 million. She admitted to backdating options awards from 2000 to 2006 for herself and others at SafeNet, a Maryland-based company that was taken private last year by an investor group.
Argo, who pleaded guilty to one count of securities fraud in October, is among a handful of former U.S. executives who have been charged criminally with wrongdoing related to backdating of option awards. More than 200 companies have disclosed internal audits or government probes surrounding options practices....
In other options backdating cases, a former chief executive of Brocade Communications Systems Inc, Gregory Reyes, was sentenced to 21 months in prison and a $15 million fine by a federal judge in San Francisco earlier this month after being found guilty at trial of 10 counts of conspiracy, securities fraud and making misleading statements about Brocade's finances.
Last year, former Comverse Technology Inc general counsel William Sorin was sentenced in U.S. District Court in Brooklyn to a year in prison for his role in a backdating scheme. Also charged in that case is former Comverse CEO Jacob "Kobi" Alexander, who is in Namibia as that government considers a U.S. request to extradite him.
Last week, former Monster Worldwide Inc CEO Andrew McKelvey, who is terminally ill, struck a deal with federal prosecutors in New York in which he admitted to options-related wrongdoing but will avoid prison time. McKelvey was criminally charged with securities fraud and conspiracy, but the government agreed to defer prosecuting him for 12 months because of his poor health. The case will be dropped after a year if he stays out of legal trouble.
January 29, 2008 at 06:36 AM | Permalink
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