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Shareholders of Getty Images don't like the looks of the company's prior stock-option practices.
Stephen Taub, CFO.com | US
March 12, 2007
Getty Images disclosed on Friday that it has been named in two shareholder derivative lawsuits in connection with backdated stock option grants.
The stock-photo company stated that on January 29, a derivative suit was filed in a Washington state court alleging that current and former executives and directors breached their fiduciary duties by backdating grants to their benefit at the expense of the company, knowingly filed false financial statements and other public filings, and sold and allowed sales of company stock while in possession of non-public information regarding backdated grants.
The complaint also alleges that certain individuals were unjustly enriched by their receipt of backdated options, abused their ability to control and influence the company, engaged in gross mismanagement of the company, and wasted corporate assets.
The complaint seeks both monetary and equitable relief, as well as reimbursement for the costs incurred in bringing the lawsuit.
On March 1, added Getty, another shareholder filed a derivative complaint in federal court in Washington state, making similar allegations.
Getty, which did not disclose the executives and directors who were targeted by the litigation, stated that "we are evaluating these lawsuits and will respond to them in due course."
In November, the company announced that the Securities and Exchange Commission was conducting an informal inquiry into its stock-option-granting practices and that a special committee would begin its own investigation.