Human Capital & Careers

SEC Eyes Outsourcer’s Options Grants

The commission has been looking into the timing of stock option grants at a number of companies to determine whether they were awarded shortly befo...
Stephen TaubMarch 7, 2006

Affiliated Computer Services Inc. announced that the Securities and Exchange Commission has launched an informal investigation into stock-option grants made by the company from October 1998 through March 2005.

In a regulatory filing, the Dallas-based technology outsourcer stated that it is cooperating with the commission.

The SEC has been looking into the timing of stock option grants at a number of companies to determine whether they were awarded shortly before the company announced good news. The specific concern, reported The Wall Street Journal, was that the grants had been backdated to help the option holders capitalize on a lower market value.

We pointed out in November that the SEC was looking into possible backdating at about a dozen companies. One, Mercury Interactive Corp., announced that same month that three top executives had resigned after an internal investigation found a long history of stock-option-grant manipulation.

Also last year, Analog Devices Inc. agreed to pay $3 million to settle civil charges regarding option grants prior to the release of favorable financial results as well as erroneous dating of certain grants, according to the Journal.

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