Risk & Compliance

EFI Faces Nasdaq Delisting

Electronics For Imaging had earlier warned of a filing delay and a pending restatement after uncovering misdated stock-option grants.
Stephen TaubMay 23, 2007

Electronics For Imaging disclosed that it has been notified of a possible delisting from the Nasdaq Stock Market for not filing its March 31 quarterly report on time.

EFI, which makes products and parts for printer management, had earlier warned of the filing delay and a pending restatement after it had uncovered misdated stock-option grants.

According to the company, a special committee determined that the difference between recorded dates and actual measurement dates for certain grants will result in material noncash, stock-based compensation expense. EFI has not yet determined the total expense or the amount to be recorded in any particular fiscal period.

EFI also stated that it plans to become current in its filings as soon as practicable.

Last December, the law firm of Stull, Stull & Brody filed a shareholder lawsuit against EFI, alleging that certain current and prior officers and directors manipulated the prices of executive and director stock-option grants.

“Awarding stock options to executives and directors at artificially low prices is alleged to violate the company’s internal documents, as well as state laws governing officer and director fiduciary duties and/or federal laws governing securities and taxation,” the law firm stated, in a press release. “In addition, the practice results in lower payments to companies, results in those companies under-reporting compensation expenses, and permits directors, officers and/or executives to unjustifiably reap millions and billions of dollars which should be disgorged and returned to the corporate coffers thereby contributing to the financial health of the company.”

At the time, Stull, Stull & Brody also stated that it was looking into more than 50 companies concerning their stock-option practices.