VideoIn an appearance before a Hinds County (Mississippi) Circuit Court judge on Friday, former WorldCom Inc. controller David Myers pleaded guilty to one count of conspiracy to commit securities fraud.
Myers is the first person to be identified in a state investigation of the Mississippi-based WorldCom.
Myers faces up to five years in prison and a fine of $5,000 on the state charge, though sentencing has been deferred. He was released on $10,000 bond on this charge.
"We made the choice to pursue state charges against this particular defendant and there may be others we may pursue state charges against," Mississippi attorney general Mike Moore told The Associated Press. "We, of course, are working in partnership with the U.S. attorney in New York."
In September, Myers became the first ex-executive of WorldCom to plead guilty to federal fraud and conspiracy charges. He faces up to 10 years on those counts.
Last week, former accounting director Buford Yates Jr. pleaded guilty to two felony charges, stating that he both conspired to commit and in fact committed securities fraud.
Former WorldCom finance executives Betty Vinson and Troy Normand also pleaded guilty last week to one count of securities fraud and one count of conspiracy to commit securities fraud.
Reportedly, Moore said that prosecutors in Mississippi "have some cooperating witnesses who have not been charged and we have some cooperating witnesses who are also defendants because of the actions they took. We are getting closer and closer to getting to those who had knowledge of these illegal things."
Swartz Raises Bail
It looks like the former CFO of Tyco International won't be spending time in prison anytime soon.
Reportedly a judge accepted a $50 million bail package offered for Mark Swartz, the onetime finance chief of the U.S. conglomerate.
The bail bond security—$5 million in stock and real estate—was put up by Swartz's parents and in-laws.
Under what is described as an unusual feature of the package, each person agreed to accept responsibility for the entire $50 million bond.
"I'm satisfied that this is an appropriate bail package," State Supreme Court Justice Michael Obus reportedly said. "The court is satisfied that these provisions will assure the defendant's appearance in court, which ultimately is all that this is about."
The Rebirth of Repricing
It appears a number of tech companies are reviving a favorite pastime from the late 1990s: repricing underwater stock options.
In a Securities and Exchange Commission filing on Friday, management at software maker Business Objects noted that employees can now trade in options that are currently out of the money for fewer new options. The strike prices of the new options reflect trading levels of the company's stock at the time they are reissued.
Thom Weatherford, CFO of Business Objects, told Reuters that the company's goals are to reduce the number of options outstanding, cut the related expense, and give employees something in exchange.
He added that the company will not book a charge related to the options-exchange program.
Other tech companies, including Siebel Systems Inc. and Nvidia Corp., have also recently offered repriced options to employees.
Software maker Siebel gave its employees the opportunity to swap underwater options for cash or stock. The company took a charge of about $60 million related to the program.
Graphics-chip maker Nvidia is letting its employees exchange nearly worthless options for fractions of shares. Nvidia is taking a charge of about $66 million for the stock swap.
Business Objects is based in both Paris and the United States.
SEC Settles with Former CFO
The SEC settled securities fraud charges with J. Mark Samper, former senior vice president of finance and chief financial officer at Flir Systems Inc., a Portland, Oregon-based maker of infrared imaging systems.
The regulatory agency alleged that Samper:
- Misstated financial statements in Flir's 1998 annual report as well as in quarterly reports filed for 1998 and the first three quarters of 1999 by fraudulently inflating the company's earnings before income taxes.
- Concealed expenses incurred by Flir as assets in a suspense account called the "project inventory" account.
- Caused two receivables to be recorded twice in Flir's accounts receivable by booking the receivables in the accounting records for two different Flir locations. The double-bookings resulted in inflated earnings.
- Lied to Flir's outside auditors regarding fraudulently recognized sales, project inventory, and the double-booked accounts receivable.
- Provided financial information for a misleading press release issued by Flir in February 2000.
Samper was the last of four former Flir executives to settle allegations they intentionally inflated the company's earnings in 1998 and 1999.
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