Earlier today, Bloomberg reported that the FBI is investigating 52 companies for backdating stock options.
In a related blog post, I mentioned this as a sign that the string of "executive-going-to-jail" stories we've seen lately won't be ending anytime soon. But the real proof of that is in the tone used by FBI Assistant Director Chip Burrus in his interview with Bloomberg. The SEC, for example, recently issued guidance that suggests plenty of option dating problems resulted from honest, if careless, administrative mistakes. Obviously, a criminal investigator is looking for the ones that weren't mistakes, but Burrus went out of his way to make that clear.
"I'm not interested in civil fines," Burrus reportedly told Bloomberg. "If I'm coming in and I'm looking, there are allegations of criminal misconduct. There's obviously a different pucker factor that comes when you start talking to an FBI agent."
I did a double take when I read that. The "pucker factor" was a favorite expression of an old boss of mine, who picked it up, along with lots of other colorful, unrepeatable expressions, during his days as a merchant marine.
Several of my colleagues, when polled, didn't know what it meant, which made me regret asking them — I referred the curious ones to these definitions in the online slang reference UrbanDictionary.com. While all are correct, my former boss would have been particularly comfortable with definition #3 and #5.
The fact that Enron's Andy Fastow got a sweet deal when he was sentenced today — four years off his 10-year plea agreement — is sure to spur debate about whether we as a nation are again softening on white collar crime. Don't count on it. If we are, then Burrus's comments suggest to me that the FBI didn't get the memo.
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