Feeds

Options scandal claims CNET, McAfee chiefs

Fat cream formula turns sour for five more

Providing a secure and efficient Helpdesk

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. ®

Beginner's guide to SSL certificates

More from The Register

next story
Scrapping the Human Rights Act: What about privacy and freedom of expression?
Justice minister's attack to destroy ability to challenge state
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
EU to accuse Ireland of giving Apple an overly peachy tax deal – report
Probe expected to say single-digit rate was unlawful
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
Hey Brit taxpayers. You just spent £4m on Central London ‘innovation playground’
Catapult me a Mojito, I feel an Digital Innovation coming on
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
EU probes Google’s Android omerta again: Talk now, or else
Spill those Android secrets, or we’ll fine you
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
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.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.