These led to numerous civil and criminal enforcement actions that helped change those practices, they say, despite some high-profile stumbles by prosecutors in recent months.At its height, the backdating scandal touched dozens of local companies that came under federal investigation or launched their own accounting reviews, which led in some cases to firings, earnings restatements and shareholder lawsuits.
was indicted on charges stemming from the company’s stock-option backdating scheme. Abrams was charged with one count of income tax evasion and two counts of aiding and assisting in the preparation of false tax returns for two other Mercury executives, according to U. According to the indictment, Abrams orchestrated the backdating of stock-option exercise dates for herself, then-Mercury CEO Amnon Landan, and then-COO Kenneth Klein, reducing the income taxes due on the gains realized by the exercises in April, May, and August 2001.
On Monday, the Internal Revenue Service filed a criminal complaint accusing Abrams of tax evasion.
This is the first case in northern California charging an individual with criminal tax violations in connection with an alleged stock options backdating scheme.
Hoping to spare her client from prison, an attorney for former Brocade executive Stephanie Jensen stood before a federal judge this month and argued that the furor over stock-option backdating was a “so-called scandal” that never amounted to much.
“Some would say it fizzled,” added defense attorney Jan Nielsen Little, who argued that a wave of investigations that shook the tech industry had turned up little evidence of wrongdoing in connection with a practice that was “widespread, albeit misunderstood.” But as authorities gear up for a retrial next month of Jensen’s former boss, ex-Brocade CEO Greg Reyes, federal officials and legal experts say the investigations found widespread accounting abuses at a host of companies.Backdating can make options more valuable by retroactively setting them at a lower price.