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VeriSign takes $160m hit to cover stock option mess up

As CFO resigns

Website security in corporate America

VeriSign's chief financial officer resigned last week as the digital certificates firm announced it would take a $160m hit to cover mishandled stock option grants.

The firm blames sloppy record keeping and a laissez-faire attitude to managing stock options for errors which led it to delay filing its papers with the SEC for 2006 and to conduct an audit that's likely to lead to a restatement of its results between 2002 and 2005.

The investigation began in November 2006 when Verisign warned it might have to take a charge of up to $250m to cover the mess.

The resignation of former CFO Dana Evan, who'd been with the firm since June 2006, follows the surprise departure of former chief exec Stratton Sclavos in late May. Both senior execs were the recipients of mishandled stock option grants, but there's no evidence of "intentional wrongdoing" on their part or that of the board as a whole.

Sclavos benefited from a generous severance package when he left the firm in May - worth more than $25m, including $5.5m to sort out a clerical error that left his account 300,000 shares light following a brace of stock splits.

Separately, VeriSign launched an audit of business travel expenses in April that led to Sclavos returning $32,000 of the $568,400 the firm had reimbursed him for the use of his private plane, the San Jose Mercury News reports. That investigation is ongoing.

VeriSign last week filed its delayed report for 2006 with the SEC. The firm is working on filing a delayed report for Q1 2007 as soon as possible. ®

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