Monday, June 12, 2006

Option Investigations Continue to Expand

The Associated Press is reporting that the parent of job search site was subpoenaed on Monday by the U.S. attorney for the Southern District of New York over the timing of stock options grants to executives.

This investigation, being conducted by multiple agencies, is increasingly causing concern. While the mere fact that documents have been requested means nothing, and in reality a criminal investigation also means nothing, there are certainly a significant number of companies who are involved.

While it may well turn out that these firms did not backdate options, and that the pricing and issuance of options was properly reviewed and approved by attorneys and accountants, these multiple investigations cannot be good for the shareholders of these companies, or the markets as a whole.
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