Human Capital & Careers

Manager Said to Rig Software for Profit

The SEC charges that a one-time stock options administrator at a high-tech company toyed with software to move hundreds of thousands of shares and ...
Stephen TaubAugust 1, 2007

A former stock options administrator of Wireless Facilities Inc. has been charged with illegally issuing and transferring more than 700,000 company shares and stock options to an account he held jointly with his wife, according to the Securities and Exchange Commission. Vencent A. Donlan, without admitting or deny the allegations, has consented to an SEC judgment that permanently bars him from committing future securities fraud violations. In addition, the commission will seek the return of ill-gotten gains—with prejudgment interest—and civil penalties against Donlan.

In an amended complaint, the SEC alleged that between November 2002 and November 2003, Donlan made false entries in WFI’s stock options software to create, and then hide, the unauthorized stock options grants to his wife, Robin D. Colls Donlan. The one-time administrator also provided false information to WFI’s brokerage firm and transfer agent, added the SEC. Donlan’s alleged scheme, which included exercising the options and selling the stock on the open market, enabled the couple to realize net proceeds of about $7.2 million.

As WFI’s stock options administrator, Donlan managed the process by which the company distributed stock options to its officers, directors, and employees. In particular, Donlan had primary control over Equity Edge, the software program that WFI used to account for, and transmit information about, its stock options. WFI, which provides outsourced engineering and network services to the wireless communications industry, generates $350 million in annual revenues. In the year Donlan allegedly issued and transferred the shares and options, WFI’s stock price rose from a low of $6.89 to a high of $18.60

Donlan was a temporary employee of WFI from May to August 2002, and WFl’s stock options administrator from August 2002 to July 2004. His wife never worked for WFl.