Settle sec mercury backdating
Option backdating cases have been a focus of enforcement in recent years. Jewels, former Director of Financial Operations Cheryl E. Between October 1999 and July 2002 defendants repeatedly backdated option grants, providing themselves and employees with options with prices at which they could purchase shares which were lower than the market price at the time the options actually were granted. 15, 2008) is another example of a settled options backdating case.
To settle the action, each defendant consented to the entry of a permanent injunction prohibiting future violations of the antifraud, proxy and reporting provisions of the federal securities laws.The only larger settlement so far is the $117.5 million Mercury Interactive settlement, which perhaps may be explained as an effort by Mercury’s acquirer, HP, to put the case in the past.The magnitude of the KLA-Tencor settlement may be a reflection of the prominence of the case (in light of the article), the magnitude of the stock drop (many other options backdating cases do not involve a significant stock price drop), and the existence and apparent seriousness of the SEC complaint, as well as the company’s public admissions about the backdating and its termination of Schoeder and others.Most of these cases have been based on allegations of scienter and fraud. She also agreed to pay a penalty of $230,000 and to the entry of an order barring her from serving as an officer or director of a public company for five years. Jewels agreed to be barred from appearing or practicing before the SEC as an attorney or accountant for five years. Kalinen agreed to an order requiring her to pay $28,000 in disgorgement plus prejudgment interest and to the payment of a civil penalty of $150,000. Friedman agreed to pay a civil penalty of $150,000. is an option backdating case brought against three outside directors.Frequently, the actions include allegations of cover-ups. The complaint claims that from 1997 through 2002, the directors approved 21 separate backdated option grants.This resulted in materially false disclosure and overstated net income at KLA and Juniper. According to the Commission, that cooperation consisted of: 1) conducting an internal investigation; 2) disclosing the findings and conclusions of that inquiry in a Form 8-K; 3) sharing the facts uncovered with the government; and 4) adopting extensive remedial actions. This option backdating case was brought against Nancy M.
Violations of the antifraud, proxy and books and records provisions were alleged. Berry moved to dismiss based on the statute of limitations and a failure to plead fraud with particularity as required by Federal Civil Rule of Procedure 9(b). A five year statute of limitations applies to any relief that is a penalty, but not to the equitable relief. Berry fails to detail her role in the backdating scheme and thus fails to meet this standard. Berry has carried her burden of demonstrating the SEC has failed to allege with particularity any securities fraud based on misstatements, other than the SEC’s allegations arising from Ms. May 19, 2008) is a settled option backdating case in which the SEC termed the cooperation of the company “swift, extensive and extraordinary … The company settled the case by consenting to the entry of a permanent injunction base on the books and records provisions. Tullos, the former vice president of human resources of Broadcom Corporation. Tullos participated in a scheme from 1998 to 2003 to backdate options at Broadcom. Tullos consented to the entry of a permanent injunction prohibiting future violations of Securities Act Section 17(a)(3) and Exchange Act Section 13(b)(5).
Without admitting or denying the allegations, United Health agreed to settle charges that it violated the reporting, books and records, and internal controls provisions of the federal securities laws.
22, 2008 — The Securities and Exchange Commission today filed a civil injunctive action against United Health Group Inc., a Minnetonka, Minn., health insurance company, alleging that it engaged in a scheme to backdate stock options.
is an option backdating case brought against Lisa Berry, former General Counsel of Juniper Networks, Inc. The SEC’s complaint claimed that from 1997 to 2002, Ms. In this settled option backdating case, the SEC also gave the company credit for cooperation.
Berry routinely used hindsight to identify dates which historically low stock prices, facilitating the backdating of option grants by KLA’s stock option committee. Berry established a similar backdating process at that company, creating minutes of fictitious stock option committee meetings to document false grant dates. In an unusual statement, the SEC outlined the cooperation of the company.
On June 25, 2007, the SEC announced (here) that it had filed a civil complaint against the company and Schroeder.