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Actually, not just three, but well over 100 companies are being
investigated for the alleged backdating of stock options. But
we would just like to highlight three companies whose investors
have been negatively impacted by backdated options problems --
Power Integrations Inc. (NASDAQ: POWI), Affiliated Computer
Services Inc. (NYSE:ACS) and Witness Systems, Inc. (WITS).
California-based Power Integrations, Inc. engages in the design,
development, manufacture, and marketing of analog integrated
circuits (ICs) for use primarily in alternating current to direct
current (DC) and direct current to direct current power
conversion. On March 13, 2006, Power Integrations announced
a delay in the filing of its Form 10-K for fiscal year 2005 to
allow for the completion of an ongoing internal investigation
of company practices related to stock-option grants to officers
and directors. The Company's shares declined from $24.19
per share to $23.93 per share.
On April 25, 2006, Power Integrations Inc. said it was spending
several million dollars on an internal investigation regarding
stock-option grants to officers and directors. On April 25, 2006,
shares declined from $24.08 per share to $21.00 per share,
a decline of approximately 13%. POWI currently trades just
over $19 per share. Power Integrations has been delisted
from the NASDAQ Global Market for failing to comply with
listing requirements.
The second example of a company with backdated options
woes is Dallas-based Affiliated Computer Services Inc. The
Company provides business process and information technology
outsourcing solutions to commercial and government clients.
On May 11, 2006, the Company disclosed that it will record
a $40 million non-cash charge based on the preliminary results
of its internal review, covering option grants for around 24
million shares that were issued following its initial public
offering in 1994 through the end of last year.
The Company also disclosed that it had received a grand jury
subpoena from the U.S. District Court for the Southern District
of New York requesting that the company produce documents
relating to its granting of stock options from 1998 through the
present. The company has admitted that it granted stock
options to executives with effective dates that "generally
proceeded" the date on which all members of its board's
compensation committee gave written approval.
The third company with options difficulties is Witness
Systems, Inc. (WITS). The Georgia-based company provides
workforce optimization software and services in the United
States. On July 27, 2006, the Witness Systems disclosed that
it was reviewing its stock options grants. Subsequently, on
August 8, 2006, the Company announced that its Board of
Directors had formed a special committee to investigate the
stock option practices because the Company had identified
some "discrepancies.” Finally, on August 11, 2006, the
Company disclosed that it intended to restate its prior
financials and revealed that NASDAQ informed it on
August 11 that the Company may be subject to delisting as
a result of the matters disclosed thus far.
The price of Witness Systems common stock has fallen from
its July 27, 2006, closing price of $18.19 per share to as low
as $12.76 per share. The stock closed at $12.91 per share
on August 11, 2006. Investors who purchased between
April 23, 2004, and August 11, 2006, are affected.
If you are an affected investor in Power Integrations Inc,
Affiliated Computer Services Inc., Witness Systems, Inc.,
or any of the companies listed below (additional info re these
cases are available on our website), you may wish to contact
us at info@securitiessleuth.com or 877.511.4717 to discuss
your options.
CNET Networks (CNET)
F5 Networks Inc. (FFIV)
IMAX (IMAX)
Joseph A. Bank Clothiers (JOSB)
McAfee Inc. (MFE)
SafeNet, Inc. (NASDAQ: SFNT)
Sea Containers, Ltd. (NYSE: SCR-A)
Semtech (SMTC)
Stage Stores, Inc. (SSI)
The Shaw Group (SGR)
Tier Technologies Inc. (TIERE)
Zale Corporation (ZLC)
Second, you should review your portfolio for class action cases
that have recently settled. If you are an affected investor –
you purchased any of these stocks during the relevant class
period, you may wish to contact the claims administrator to
obtain additional information. Remember, if you don’t submit
your claim form, you won’t receive your share of any settlement.
Advanced Marketing Services, Inc. (MKT)
Class Period: January 16, 1999 to January 13, 2004
Claims Deadline: December 19, 2006
Claims Administrator: Garden City
Federal Home Loan Mortgage Corp. (FRE)
Class Period: July 15, 1999 ti January 20, 2003
Claims Deadline: December 7, 2006
Claims Administrator: Garden City
Information regarding other recent settled cases, including the
cases listed below can be found at www.securitiessleuth.com.
Symbol Technology, Inc. (SBL)
Tellium Inc. (TELM)
Imperial Chemical Industries PLC (ICI)
Vistacare, Inc. (VSTA)
ARM Financial Group (ARMGQ)
Carreker Corp. (CANI)
Again you should contact the claims administrator (rather than us).
However, if you are an affected investor in any of the companies
under investigation, you many wish to contact us so that you can
consider your options.
Likewise, if you happen to be aware of corporate restatements or
other financial fraud -- especially if you're a victim -- you're
encouraged to contribute to the Sleuth by giving your own
tip-offs at www.securitiessleuth.com or by e-mailing
info@securitiessleuth.com. You can also call Mark McNair at
877-511-4717. If you have a friend or colleague you think
would benefit from The Sleuth, please pass along this issue and
ask them to sign up at
www.cartville.com/app/join.asp?MerchantID=47994.
Warmest regards,
Mark McNair
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