Computer associates backdating
These cases are caused by a number of situations and are made worse by externalities, adverse selection, moral hazards, and unanimity.
Kent Roberts, 50, of Dallas, was indicted Tuesday by a federal grand jury on seven counts of fraud for improperly backdating options between 20, according to a statement from the U. Attorney's Office for the Northern District of California in San Francisco.
Roberts is charged with "devising a scheme to defraud by granting himself and others valuable in-the-money stock options while hiding the true nature and value of the stock option grants," the statement says. Roberts joins a small but growing list of executives or former executives of companies charged in the U. companies are under investigation by the SEC, federal prosecutors or through internal audits.
Roberts hid the fraud from the company, then known as Network Associates Inc., its board, shareholders, auditors and the U. S with improperly backdating stock options grants to make them more profitable for the recipients, but at the expense of shareholders. According to the indictment, the Network Associates board granted Roberts the option to buy 20,000 shares of Network Associates' stock at the strike price of US.62, which was the price at which the stock closed on Feb. In late 2000, Roberts became concerned that his options were "underwater," that is, the US.62 exercise price of the grant was more than the market price for stock.
Roberts also participated in a conference call with the SEC at the time, in which he implicated the controller.
All the while, the indictment says, Roberts never mentioned that the controller backdated his options, too.
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In November 2006, a two billion two hundred million dollar fraud scheme was uncovered.