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SEC's got its eyes, claws on Schroeder, Therrien |
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Jul 26, 2007 at 04:07 PM |
Surprise, surprise! The Securities and Exchange Commission (SEC) has handed down stock options backdating-related indictments of two former semiconductor equipment company honchos: Ken Schroeder (ex-KLA-Tencor) and Robert Therrien (ex-Brooks Automation).
Ken faces civil fraud charges, but avoided the ignonimy of criminal counts, while Bob got hit with the double-shot of civil and criminal (for tax evasion).
First, here's a bit of what I pulled off the Dow Jones Newswire account about Ken's legal peccadillo:
"The SEC filed civil-fraud charges against Kenneth Schroeder, 61 years old, of Los Altos Hills, Calif., accusing him of repeatedly backdating options between 1999 and 2002. The SEC also said he backdated in 2005, after passage of the Sarbanes-Oxley Act limited backdating opportunities by requiring companies to disclose stock-options awards within two days."
Now here's some of what DJ had to say about Bob's even-dicier predicament:
"Federal prosecutors on Thursday said that a grand jury has handed up a one-count criminal indictment accusing former CEO Robert Therrien, 72 years old, of tax evasion. Prosecutors allege that Therrien backdated an option to purchase 225,000 company shares after he learned that his options to buy the stock had expired months earlier, in August 1999.
"The Securities and Exchange Commission filed civil securities-fraud and other charges against Therrien, and said that he had personally made more than $10 million from his conduct. Regulators said that besides backdating his own options in 1999, Therrien had also perpetuated a broader scheme that resulted in millions of dollars of undisclosed compensation to himself and other employees."
Ouch! These once-shining lights of SEMIdom may be brought low by federal prosecutors, with Bob facing the possibility of doing time in the big house (OK, a minimum-security collection of smaller houses), if convicted. Talk about putting the "bane" in Sarbanes-Oxley!
In recognition of the indictments, here are some newly redefined initialisms, once part of the lexicon of the two bad boys' former corporate domains, customized for the occasion:
For Ken, "ADC" no longer means "automatic defect classification," but "arrogantly dismissing counsel." (Yup, the Feds claim he was told by legal counsel that what he was doing was wrong/illegal, but he ignored the advice.)
For Bob, "AMHS" gets tweaked from "automated material handling system" to "attempting to manipulate handling of stocks." (Uh, that one doesn't need further explanation!)
The Feds say they are continuing their investigations, so other familiar names from the semiconductor manufacturing community may yet have their days in court---and more initialisms or acronyms will have to go through a Chip Shots definitional conversion process.
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