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Friday, August 04, 2006

Stock options troubles: background

Apple Computer may be the highest-profile but it is not the first company to admit that it would probably have to restate its earnings as a result of the widening stock options backdating scandal.

McAfee, the security software company, said last month that manipulation of the timing of options meant it would have to restate earnings going back to at least 2003, and the impact would be significant. It also fired its general counsel as a result of the episode.

Mercury Interactive, a business software company, was also forced to restate several years’ worth of earnings reports. Mercury’s shares were de-listed from the Nasdaq and its former chief executive resigned last November amid revelations that he and other executives had benefited from favourable backdating of stock options grants.

San Francisco-based CNET Networks also said last month that it expected to restate financial statements.

Last month, US authorities handed down the first criminal and civil charges in the scandal, charging three former executives of California technology company Brocade Communications Systems.

posted by Brian Moran @ 3:20 PM   0 comments

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