February 27, 2007 3:58 PM PST
Ex-McAfee lawyer indicted in backdating probe
Last modified: February 27, 2007 4:15 PM PST
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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.S. Attorney's Office in San Francisco, which is bringing the charges.
Roberts is scheduled for arraignment on March 1, before Magistrate Judge Joseph C. Spero in San Francisco, according to the U.S. Attorney's office.
Security software specialist McAfee was known as Network Associates for several years. Roberts' alleged backdating took place in 2000 and 2002, prosecutors said.
Backdating refers to a practice of retroactively timing stock options grants to a point at which the stock price was particularly low. Backdating itself is not necessarily illegal, provided companies properly disclose and account for the favorably priced options.
Roberts' indictment is the second case brought by a federal task force probing the improper pricing and accounting of stock options. Two former executives of Brocade Communications Systems, including its ex-CEO, were brought up on federal charges last year.
"It is integral to the public trust in our financial markets that transactions affecting a company's financials are recorded honestly, particularly by those who are responsible for regulatory compliance," U.S. Attorney Scott Schools said in a statement.
Roberts is charged with two counts of mail fraud, one count of wire fraud, three counts of making false Securities and Exchange Commission filings, and one count of falsifying the books, records and accounts of Network Associates.
In October, amid an internal probe into its options practices, McAfee shook up its management ranks, replacing CEO George Samenuk and President Kevin Weiss. Roberts was terminated from McAfee in May 2006, according to the prosecutor's press release.
A host of companies have come under fire for the practice of backdating options, including CNET Networks, publisher of News.com. Dozens of companies face either internal probes or inquries from the Securities and Exchange Commission and U.S. Attorney's offices, or both.
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