Feeds

Options scandal claims CNET, McAfee chiefs

Fat cream formula turns sour for five more

The next step in data security

Two top McAfee execs and three CNET Networks chiefs have quit their jobs in the wake of America's growing backdated options scandal.

Security software firm McAfee has appointed board member Dale Fuller as interim chief executive and president after CEO George Samenuk resigned, and president Kevin Weiss was fired by the board over misallocations of McAfee stock. Fuller joined McAfee's board in January, having previously served as Borland Software's CEO.

Additionally, McAfee said it will re-state earnings for a 10-year period, a move that is expected to cost between $100m and $150m.

And so to Shelby Bonnie, CEO and co-founder of CNET Networks - the biggest online tech site - today quit his job over misallocations of CNET stock, between "at least" 1996 and 2003. But, get this: Bonnie retains his position - and presumably remuneration - as a CNET board member.

Two other CNET employees have also resigned, following an investigation by a special committee, which reports: "A number of executives of the company, including the former CFO and the recently resigned CEO, general counsel and SVP of human resources, bear varying degrees of responsibility for these deficiencies."

In a departing statement on Wednesday, Samenuk - McAfee's CEO for six years - said: "I regret that some of the stock option problems identified by the special [options] committee occurred on my watch. I am proud of the accomplishments of the McAfee team in serving our millions of customers during my tenure."

Bonnie expressed his deep disappointment. "I apologize for the option-related problems that happened under my leadership," he said.

The fat cats that caught the cream

Samenuk, Weiss and Bonnie are the latest casualties in a scandal that has seen some 120 US public companies - most in IT - either come under government investigation, or launch their internal probes into allocation of stock. So far, more than 30 executives, including CEOs, presidents, CFOs and heads of human resources (HR), have left companies that are under investigation. Executives from two, Brocade Communications and Comverse Technology, have been indicted.

Internal investigations are intended to clear house and stave off prosecution by either the US government or financial regulators. The FBI and the Securities and Exchange Commission (SEC) are taking a tough line to help restore the public's confidence in the market place. Misallocation of stock, involving falsifying the date when grants were awarded, is believed to have cost $2.5bn in earnings.

It became common practice for tech companies to hand out stock to retain staff in the highly competitive recruitment environment of the late 1990s. It also became common practice, though, to bend the rules over when stock was granted, without anyone really bothering to stop and question the legality.

In the Brocade case, ex-chief executive George Reyes was granted sole authority to approve stock allocations - a process that usually goes through a special committee at most corporations. Prosecutors claim the practice of backdating stock became institutionalized at Brocade, as it drew the active support of the former vice president of HR and CFO. ®

Security for virtualized datacentres

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Why Oracle CEO Larry Ellison had to go ... Except he hasn't
Silicon Valley's veteran seadog in piratical Putin impression
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.