Thursday, July 13, 2006

Feds Target Silicon Valley Firms With New Options Task Force

The U.S. Attorney's Office and the FBI have formed a new stock options backdating task force, focused on the backdating of stock options of Silicon Valley companies. The new task force, which includes members of the U.S. Attorney's Office and the FBI, said Thursday that the task force will be charged with investigating allegations of companies and individuals in Northern California who retroactively changed the grant dates of stock options with the intent to defraud. The task force is the first to be created around the wide-ranging stock options back-dating scandal that has hit the high tech industry. So far, the investigation into stock option back-dating has been led by the SEC. The U.S. Attorney's office said that there will be eight members of the task force, will investigate any allegation in which a publicly traded company has illegally backdated stock options. In Southern California, the SEC has so far targeted Irvine-based Broadcom, Camarillo-based Vitesse, Aliso Viejo-based Quest Software, and Camarillo-based Semtech, with Camarillo-based Vitesse being delisted by the Nasdaq, losing several executives, and last week facing a demand by its largest shareholder to sell the company.