Backdating executive xbox updating error
But they found him guilty of lying about the backdating to KB accountants and in a 2006 quarterly report. There was no evidence that he planned it, but he certainly covered it up,” said juror Ron Dick, a 72-year-old retired aerospace worker who lives in Harbor City. During the trial, prosecutors sought to portray Karatz as a greedy, scheming executive who deceived shareholders and federal regulators while inflating the value of his stock options from 1999 to 2005. “This is a victory for the Justice Department, not so much in the backdating issue, in which they weren’t successful, but more in emphasizing the need for corporate truthfulness,” said Peter Henning, who teaches securities law at Wayne State University Law School in Detroit. This case may be more about executive hubris than anything else.”The Karatz trial came only a few months after federal prosecutors suffered a significant setback in the options backdating prosecution of Broadcom Corp. Even without the backdated options, Karatz was one of the nation’s highest paid executives, making more than 0 million in compensation during his last three years at the company.
Karatz, 64, is one of the most prominent corporate executives to be charged criminally in the government’s long-running crackdown on options backdating. The scheme enabled him to make more than million in “secret pay,” Assistant U. Revenue soared under his watch, reaching a record billion in 2006.
Bruce Karatz, who helped turn Westwood-based KB Home into one of the nation’s most successful home builders during two decades as its chief executive, was convicted Wednesday on four felony charges related to the manipulation of executive stock options. Stock options allow employees to buy a certain amount of stock at a set price, typically the date on which they are granted.
A federal jury in Los Angeles convicted Karatz of two counts of mail fraud, making false statements in a regulatory filing and lying to the company’s accountants. The jury rejected the government’s claim that Karatz intentionally defrauded shareholders by backdating stock option grants from 1999 to 2005 to make them more valuable. Wright II said Karatz could remain free on -million bond, secured by his Bel-Air home, until sentencing. Companies can boost the value of these options by backdating them to dates when the stock price was lower than the actual grant date. A federal judge in Santa Ana dismissed charges against both men and against two other company executives, saying prosecutors and unfairly influenced witnesses, making it impossible for the defendants to receive a fair trial.
We acknowledge the Brigham Young University Silver Fund and Whitmore Global Management Center, and Stanford University’s Rock Center for Corporate Governance, which paid for databases and research support.
In 2001 he was granted stock options amounting to 7.5 million Apple shares, allegedly without the required authorisation from the company's board of directors.
In the context of mutual funds, a feature allowing fundholders to use an earlier date on a letter of intent to invest in a mutual fund in exchange for a reduced sales charge, e.g.
Giving retroactive value to purchases from the earlier date.
He said Ray changed his story to please prosecutors and to get them to give him a plea bargain.“Ray is not worthy of your trust. Dick, the juror, said he hoped that the judge would give Karatz probation and a big fine, but not jail time.The practice of allowing a mutual fund shareholder to use previous purchases of the fund's shares so as to qualify for reduced commission charges on subsequent purchases.Backdating is used when a fund offers declining proportional sales charges on larger purchases.In the context of corporate governance, the illegal practice of setting the date of options awarded as part of executive compensation to a period when the stock price was very low (rather than setting the date of the options on the date the award was made).The act of dating a document before the date it was actually signed.
We appreciate helpful comments from an anonymous referee, Yakov Amihud, Louca Christodoulos, Jeff Coles, Michael Drake, Jarrad Harford (the editor), William Hubbard, Dirk Jenter, Wei Jiang, Marcel Kahan, Steven Kaplan, Jonathan Karpoff, Ron Kasznik, Mike Klausner, Dave Larcker, Erik Lie, Allan Mc Call, Todd Mitton, Brennan Platt, Ryan Pratt, and David Yermack, as well as seminar participants at Brigham Young University, University of Chicago, Columbia University, Harvard University, Northwestern University, New York University, Stanford University, Yale University, the 2013 American Law and Economics Association conference, and the 2014 European Financial Management Association conference.