But at the core, he had something more telling to say: Prosecutors couldn't prove the defendants did anything wrong.
The Broadcom cases, among others, illustrate the struggles the U. attorney's office has encountered in prosecuting corporate executives for backdating stock options, a practice that makes it appear that their companies had fewer expenses and greater income than they really had.
This occurred even though Vitesse was at the time conducting an internal investigation after The Wall Street Journal raised questions about stock option practices at companies including Vitesse, and company lawyers had warned that an SEC investigation was likely, court papers show.
Tomasetta and Hovanec said they later realized that altering the minutes was wrong, and told internal investigators what they had done. The original indictment accused Tomasetta and Hovanec of illegally backdating stock options issued over a 3-year period starting in 2001, and scheming to mislead investors about Vitesse's business from 2001 to 2006.
In September, Tomasetta agreed to pay 0,000 and Hovanec ,000 in civil fines in settlements with the U. The case was one of the last of a wave of criminal and civil enforcement actions stemming from a scandal that erupted in 2006 over allegations that companies manipulated stock option dates, often increasing individuals' profits.
Prosecutors had accused Tomasetta, 65, and Hovanec, 61, of inflating company earnings and backdating stock options.
The intention was that each of these entities would be “divisions” of the original S-corp which would be the “holding company” for them all, which would have made it possible for just one tax return to be filed under the tax ID of the holding company.
The LLCs would have been “disregarded entities” with the owner being the holding company, 100%.
One day after he was convicted on felony charges related to the manipulation of stock options, former KB Home Chief Executive Bruce Karatz and his legal team shifted their focus Thursday to a new legal battle: trying to keep him out of prison.
These grants were given without proper disclosures, and thus hid true compensation numbers from investors, the SEC adds.
Moreover, Berry acknowledged in a 1998 memorandum that repricing executive stock options with an earlier grant date’s lower price would result in KLA having to take “a charge to its P&L,” the SEC said.
Ruehle, who faces 14 counts of fraud and conspiracy related to the stock option scandal. The stunning dismissals of criminal cases against three former Broadcom Corp.
executives in the last week focused on what the judge called "shameful" misconduct by prosecutors.