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11-Jun-2019 13:03

Samueli from denying culpability for the backdating of the options at Brocade as he had during his SEC testimony. Samueli had not made a false statement and that there was no factual basis for the guilty plea.

The government had improperly made the deal and accepted the plea.

A federal grand jury on Tuesday indicted the former general counsel of Mc Afee on fraud charges related to alleged stock options backdating. Security software specialist Mc Afee was known as Network Associates for several years.

Kent Roberts, 50, of Dallas, is accused of "granting himself and others valuable in-the-money stock options while hiding the true nature and value of the stock option grants from Network Associates, its board, its shareholders, its auditors, the public and the SEC," according to a press release from the U. Attorney's Office in San Francisco, which is bringing the charges. Roberts' alleged backdating took place in 20, prosecutors said.

Typically, the red flags are a series of facts or events which demonstrate that either person knew or was reckless in not knowing. While there is no doubt that options were backdated at Mc Afee, that does not mean there was intentional fraud requiring criminal or even civil law enforcement fraud actions. Red flag number two is the case of former Brocade CEO Gregory Reyes. The prosecutors claimed to have evidence of clear, intentional fraud on the shareholders to support their charges. The government intentionally misled the jury by misstating and misrepresenting key evidence, as discussed here.

A series of these red flags have emerged in the stock option backdating cases. Jurors deadlocked some which the trial judge strongly recommended be dropped. Indeed, the fact that DOJ lost this case should, at a minimum, raise questions, since the government typically prevails in criminal cases. When prosecutors distort the evidence to win, it raises a serious red flag, not just about the misconduct, but also the quality of the evidence.

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A host of companies have come under fire for the practice of backdating options, including CNET Networks, publisher of All the while, the indictment says, Roberts never mentioned that the controller backdated his options, too.The government also says that Roberts altered board meeting minutes to change the date on which options were granted to the company's then-CEO and chairman. 15, 2002, when the stock closed at US.19, to Jan. The greater the difference between the lower options price and the higher market price when the executive exercises the option, the greater the profit.Roberts initiated an investigation in 2002 and recommended that the controller be removed from his position.

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Roberts also participated in a conference call with the SEC at the time, in which he implicated the controller.

Roberts hid the fraud from the company, then known as Network Associates Inc., its board, shareholders, auditors and the U. S with improperly backdating stock options grants to make them more profitable for the recipients, but at the expense of shareholders. According to the indictment, the Network Associates board granted Roberts the option to buy 20,000 shares of Network Associates' stock at the strike price of US.62, which was the price at which the stock closed on Feb. In late 2000, Roberts became concerned that his options were "underwater," that is, the US.62 exercise price of the grant was more than the market price for stock.

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