SEC moving on options cases: Cox |
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Thu, 01 Feb 2007 00:59
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WASHINGTON (AFX) - The Securities and Exchange Commission's investigations of suspicious timing of stock options grants at more than 100 public companies are proceeding vigorously and the agency continues to work closely with federal prosecutors in pursuing cases, SEC Chairman Christopher Cox said Wednesday.'This is a very aggressive program,' Cox told reporters.He also said there is no disagreement among him and the four other SEC commissioners over how stringently to penalize companies found to have engaged in improper backdating of grants to executives. Cox was responding to questions about a news report that said the agency's enforcement efforts were stalled because of dissension among the commissioners over whether companies should be fined.In addition, he said, the SEC is working have ry closely' with the Justice Department in pursuing stock options cases.The federal prosecutors and the SEC have filed criminal and civil charges, respectively, against former officials of two technology companies, Brocade Communications Systems Inc. and Comverse Technology Inc.Some observers have criticized the pace of the enforcement effort.SEC officials say the agency is focusing on cases of serious fraud -- with elements such as deliberately lying, forging documents or deceiving directors or investors.At issue in many of the investigations is a practice known as backdating: Stock options are issued retroactively to coincide with low points in a company's share price. This fattens profits for options recipients when they sell their shares at higher market prices.Backdating options can be legal as long as the practice is disclosed properly to investors and approved by the company's board. In some cases, however, the practice can violate federal accounting and tax laws.----Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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