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Corporate America’s next scandal could be backdating stock options

Corporate America’s next scandal could be backdating stock options

by Rick Turoczy on June 5, 2006

The newest intrigue in corporate America, the apparent backdating of stock options to boost top executives’ compensation, is rapidly taking on the dimensions of a major scandal.

The number of public companies under investigation by the Securities and Exchange Commission or federal prosecutors has grown to more than 30 and executives at several companies have been fired.

Optical switch maker Sycamore Networks Inc. disclosed this week that it received a subpoena from federal prosecutors in Massachusetts; high-tech firm Rambus Inc. said it had launched an internal investigation; and Quest Software Inc. and drug company Sepracor Inc. reported SEC inquiries. Antivirus software maker McAfee Inc. fired its general counsel for misconduct involving company stock options.

Subpoenas have been issued by U.S. attorneys’ offices in several cities including New York, which led off the wave of criminal investigations.

Corporate America’s next scandal could be backdating stock options

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