Securities and Exchange Commission Chairman Christopher Cox sent a chilling warning to executive suites: The regulator is on the verge of charging more companies—and perhaps individuals—for violations in connection with the stock options backdating scandal.
“I expect that we’ll be seeing more, as a result of that process, in days ahead,” Cox told reporters after speaking at a conference on stock options dating, according to Reuters. SEC officials are saying that the regulator is focusing on what it calls cases of serious fraud, where there was deliberate lying, document forging, and deception of directors or investors, added the Associated Press.
Altogether, the AP noted that more than 120 companies are currently under investigation for their options granting practices alone. One company that dropped off the SEC’s list was software company Intuit. The software maker announced on Monday that the SEC notified the company that its investigation of Intuit’s historical stock option granting practices has been terminated and that it will not recommend any enforcement action.
Other companies were not as fortunate. For example, Monster Worldwide announced that Andrew J. McKelvey, founder and former chief executive resigned as chairman emeritus of the career website, saying that he declined to be interviewed by a special committee of the board charged with reviewing stock option grants. Robert Jones, a Monster spokesman, told The Wall Street Journal that the company and its board “demanded full compliance with the special committee and its representatives.”
Meanwhile, semiconductor maker Atmel Corp. said that based on its audit committee’s preliminary results of an investigation into past options practices, the company’s financial statements for each of the three fiscal years ended 2005, and quarterly reports filed for each of those years, as well as financial statements included in the company’s quarterly report for the first quarter of 2006, should no longer be relied upon. Atmel also said it might restate results for fiscal years prior to fiscal 2003 and, therefore, financial statements for fiscal years prior to fiscal 2003 should also no longer be relied upon.