Human Capital & Careers

Options Probes Return from Long Weekend

McAfee fires general counsel; KLA-Tencor notified of SEC investigation; American Tower targeted by shareholder lawsuit.
Stephen TaubMay 30, 2006

Anti-virus software maker McAfee announced on Tuesday that it fired general counsel Kent Roberts after becoming aware of an episode in 2000 involving “improper” stock-option grants.

McAfee added that it has retained independent counsel to aid in the company’s internal review, and that it has discussed option grants with the staffs of the Securities and Exchange Commission and the Department of Justice.

Also on Tuesday, semiconductor equipment manufacturer KLA-Tencor disclosed that it received notice from the SEC of an informal inquiry relating to past stock option grants. The company added that it intends to cooperate fully.

American Tower — an owner and operator of wireless and broadcast communications sites in the United States, Mexico, and Brazil — announced Tuesday that a securities class-action lawsuit was filed in federal court against the company and certain current or former officers and directors. The lawsuit alleges breach of fiduciary duties with respect to the company’s historic stock-option-granting practices.

The SEC opened an informal inquiry into American Tower earlier this month and requested documents related to the company’s stock options.

And last week, Linear Technology, which manufactures analog integrated circuits, disclosed that the company and certain officers and directors had been targeted by two shareholder derivative lawsuits, alleging improper backdating of stock options granted between 1995 and 2002.

”The company does not use a lookback in connection with its stock-option grants,” maintained executive chairman Robert Swanson Jr., in a statement. The company added that it intends to defend the lawsuits vigorously.