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Report: Stock Option Probes Top 100

The widening scandal has forced many of the companies to delay their quarterly reports for June.
Stephen Taub, CFO.com | US
August 10, 2006

The number of companies that have disclosed internal or federal probes of their stock option grants has reportedly hit triple digits. At least 102 companies are now under some sort of scrutiny, according to Bloomberg.

The latest to report investigations are HCC Insurance Holdings Inc., ViaSat Inc., Moldflow Corp. and Alkermes Inc., the wire service reported.

The widening scandal has also forced many of the companies to delay the filing of their June quarterly results. “The extension is necessary in order to provide time for the company to finalize with its auditors the accounting treatment for certain stock option grants by the company,” Alkermes stated. Other late filers include Broadcom, UnitedHealth, Cablevision Systems, and Sepracor.

Bloomberg counts 19 people who have lost their jobs in the wake of the options scandal and five who face criminal charges. The latter includes Comverse Inc. founder Jacob Alexander, who is currently a fugitive after failing to show up for his arraignment on Wednesday.

Some of the companies under scrutiny are seeking the standard five additional days to file and said they plan to file by August 14. Others, however, concede they can’t identify a date when their quarterly filing will be ready.

The delayed reports could hurt the companies’ underlying stock prices since there suddenly won’t be up-to-date financial results for investors to consider, Howard Silverblatt of Standard & Poor's told Bloomberg. That in turn, could hurt the stock’s liquidity.

Further, the longer a company goes without filing results, the more it's prone to being delisted by the exchange on which they trade.




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