Human Capital & Careers

Option Timing Probes Snare More Firms

KLA-Tencor, Medarex, Cnet Networks, Analog Devices, and Power Integrations join the list of more than 20 companies being investigated by regulators...
Stephen TaubMay 25, 2006

Five more companies announced Wednesday that they are targets of investigations of either the Securities and Exchange Commission or the US Attorney or both as a result of the timing of option grants. The companies include KLA-Tencor, Medarex, Cnet Networks, Analog Devices, and Power Integrations.

Altogether some 22 companies are being investigated by the Justice Department, the SEC or the Internal Revenue Service, according to a count by Bloomberg.

In a press release, Analog Devices, which is being probed by both the SEC and US Attorney, pointed out that it previously reached a tentative settlement with the SEC regarding the regulator’s inquiry into its granting of stock options.

That settlement would conclude that, with respect to options granted to company employees (including officers) and directors on November 10, 2000, the company should have disclosed in its proxy filings that it had priced these options prior to releasing favorable financial results.

The settlement would also conclude that the appropriate grant date for options granted on July 18, 2001 should have been July 26, 2001, which is five trading days after the original date, Analog added.

The company stressed it is continuing to work with the SEC to finalize the settlement.

Analog Devices also said the settlement would not result in a restatement, because the effects of revising the measurement dates for the options in question would not be material.