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The backdated options scandal seems to grow daily. The number
of corporate officers who have had their options backdated in
order to enrich themselves at the expense of unsuspecting
shareholders is shocking. The two companies under scrutiny
this week are Affiliated Computer Services, Inc. (NYSE: ACS)
and Trident Microsystems (NASDAQ: TRID)
Affiliated Computer Services, Inc. provides business process
and information technology outsourcing solutions to commercial
and government clients. After Thanksgiving, the Dallas-based
Company’s CEO, Mark King, and its CFO, Warren Edwards, both
resigned. The Company’s internal investigation concluded that
the duo had backdated options in a number of cases. Moreover,
the investigation concluded that Mr. King and Mr. Edwards had
misled ACS’s directors and lawyers regarding the backdated
options.
It isn’t surprising that the internal investigation concluded that
the CEO and CFO had lied. What is somewhat surprising is how
long it took the internal investigation to reach that conclusion.
As you may recall, in March of this year ACS was one of the first
companies that the Wall Street Journal identified, based on statistical
analysis, as one which probably backdated its options. Specifically,
as the Wall Street Journal noted this Monday, its March “analysis
concluded that the odds were one in 300 billion that the pattern
of past stock option grants to Mr. Rich, the company’s former CEO,
was chosen by chance.” That is as likely winning the PowerBall
lottery twice in a week.
With those odds you would have thought that the internal investigation
would have been accelerated. At least now the ACS investigation
can move forward, but it would have been better for shareholders
if the matter had been resolved months ago.
Another company with backdated options problems is Trident
Microsystems. Trident Microsystems, Inc. engages in the design,
development, and marketing of integrated circuits for digital
media applications, such as digital television, liquid crystal display
television, and digital set-top boxes. Again, as with ACS, it took
a considerable amount of time for true facts to be revealed.
On June 16, the Company disclosed it had received a subpoena
from the U.S. Attorney's office in New York. The Company also
indicated that, on May 26, its Board set up a special committee to
examine past options grants from 1995 to 2004.
Finally, months after the special committee was formed on
Sept. 11, Trident Microsystems said certain stock-option grants may
have differed from the recorded grant dates, possibly resulting in
additional charges. As a result, the Company preliminarily expects
it will "likely" have to restate financials "for at least some periods."
On November 20, Trident said a special committee found the
Company used incorrect measurement dates when accounting for
option grants. Not surprisingly, finally, Frank Lin, the Company’s
CEO and Chairman, resigned effective November 15, 2006.
If you’re an affected investor in Affiliated Computer Services, Inc.
(NYSE: ACS) Trident Microsystems (NASDAQ: TRID), or any of the
cases under investigation listed below, you may wish to contact us
at info@securitiessleuth.com or 877-511-4717 to discuss your options.
Other cases under investigation:
Apollo Group, Inc. (NASDAQ: APOL)
HCC Insurance Holdings (NYSE: HCC)
Presstek, Inc. (NASDAQ: PRST)
Quest Software (NASDAQ: QSFT)
Warner Chilcott Limited (NASDAQ:WCRX)
Now with respect to securities 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.
Ask Jeeves (ASKJ)
Class Period: November 18, 1999 to May 16, 2000
Claims Deadline: February 5, 2007
Claims Administrator: Rust Consulting
Broadwing, Inc. (BRW)
Class Period: January 17, 2001 to May 21, 2002
Claims Deadline: November 30, 2006
Claims Administrator: Garden City
Information regarding other recent settled cases, including the
cases listed below can be found at www.securitiessleuth.com.
Advanced Marketing Services
King Pharmaceuticals, Inc.
MasTec, Inc.
McLeodUSA, Inc.
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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