Tech companies fingered by SEC share option probe
Juniper Networks and Openwave Systems have said they have been contacted by regulators investigating alleged abuse of share options back in the heady days of dotcom lunacy.
Juniper said it had been contacted by the US Attorney for Brooklyn asking for information about granting of stock options. Mobile software firm Openwave confirmed it had received a similar letter from the Securities and Exchange Commission (SEC).
Stock options became the incentive of choice for tech companies in the late 90s. The suspicion is that some companies moved the date of options back, and so guaranteed executives made a profit.
CNET Networks has formed a committee to look at how it granted share options, but has not said if it is under investigation.
Chip kit maker KLA-Tencor and chip designer Trident Microsystems join those companies that have been contacted by regulators seeking more information. RSA Security is also under SEC investigation.
Merrill Lynch yesterday warned its investors that the scandal may well spread. The firm investigated semiconductor companies and found shares were consistently doing better in the 20 days after options were granted.
On a day of big falls on exchanges worldwide, Nasdaq lost one per cent while Openwave fell 4.5 per cent and CNET almost seven per cent.