Monster joins companies under stock options review

Reuters - Three companies, including the parent company of online job site Monster.com,  today disclosed inquiries into their stock options grants in a scandal that has widened to some 40 companies.

The growing investigation into possible backdating of stock options -- an effort to take advantage of a dip in the underlying share price -- has also prompted the largest U.S. pension fund to request explanations from 25 companies.

Monster  Worldwide Inc. said today that it formed a committee of independent directors to analyze its options practices after a Wall Street Journal report questioned whether grants were backdated or timed ahead of sharp rallies in its stock price.

Microchip maker Broadcom Corp. and data center services company Equinix Inc.  each said they had received informal requests for information from the U.S. Securities and Exchange Commission over their options grants.

Technology companies have been the most vulnerable to such probes to date, prompting declines in share prices and in some cases, executive dismissals or shareholder lawsuits.

Federal prosecutors and securities regulators are weighing the type of legal action that could be taken over suspiciously timed options packages.

Several companies that have already disclosed reviews of options packages reported new developments in their cases today.

Applied Micro Circuits Corp. and Cyberonics Inc. said they had been contacted by the SEC, while Comverse Technology Inc. and its subsidiary Ulticom Inc. delayed filing first-quarter results because of their ongoing investigations.

In a further sign of potential fallout, the California Public Employees' Retirement System (Calpers), a pension fund with more than $200 billion in assets, said last week that it had asked for explanations from 25 companies identified in the news media for questionable options practices.

"These allegations raise concerns about a lack of oversight by the board of directors, weak internal controls, weak internal and external audit practices, and poor accounting -- as well as the possibility of civil and criminal penalties against these companies," said Christianna Wood, senior investment officer for global equity at Calpers.

Calpers sent letters asking companies already in the process of reviewing their options grants, such as Affiliated Computer Services Inc. and Comverse, to disclose publicly their findings and any new policies they may set regarding option grant dates.