Tencor scandal options backdating
The first criminal backdating trial, against former Brocade CEO Greg Reyes, is expected to go to the jury in the next few days.
Contact Mark Schwanhausser at [email protected] (408) 920-5543.
As a founding member of a special stock-option committee empowered by the board in 1997 to approve option grants, Schroeder helped approve hundreds of mispriced options granted to top executives, high-performers and new hires.
According to a June 1999 memo from an unidentified executive that instructed the human resources department how to backdate grants for new employees, the company compiled lists of new workers for several weeks, then gave the special committee a list of three or four of the lowest stock prices to pick from.
Last week, federal investigators announced criminal charges against former executives of Brocade Communications Systems, and they're hinting that more cases may be on the way.
It also has overhauled its internal controls to prevent a recurrence of the abuses that led the company to restate financial results from 1994 to 2005 to include 0 million in backdating charges.
But that might not be the end of the legal troubles for former executives at KLA-Tencor, where co-founder Kenneth Levy, general counsel Stuart Nichols and director Jon Tompkins resigned as the scandal unfolded starting in May 2006.
Also, some companies have independently confirmed that they've been contacted by federal investigators.
Those include Altera, Applied Micro Circuits, Asyst Technologies, CNET Networks (publisher of CNET News.com), Equinix, Foundry Networks, Intuit, Marvell Technology Group, RSA Security and Veri Sign.
“Help me, don’t just tell me how to follow a strict interpretation of rules,” Schroeder wrote. His legal team said Schroeder inherited an option-granting process that was set in motion before he was promoted to chief executive, then trusted associates’ advice on legal and accounting issues.