Feeds

Options scandal claims CNET, McAfee chiefs

Fat cream formula turns sour for five more

Security for virtualized datacentres

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
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
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.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
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?
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.