ACS Gets Fed Grand Jury Info Demand

Reuters reported that ACS disclosed the subpoena in a Securities and Exchange Commission regulatory filing. ACS said the grand jury document was issued from the US District Court for the Southern District of New York and the company intends to comply with authorities’ information demands.

The latest revelation follows word last week that the SEC was investigating the way ACS accounts for stock option grants.  It also said it expected to take up to $40 million in charges pending an internal investigation into the matter.

However, ACS also said its stock-options accounting practices had not violated the laws of Delaware, where it is incorporated. “We believe, based on our conclusions and findings from the investigation, that our practice is legal and appropriate,” company spokeswoman Lesley Pool told Reuters..

Dallas-based ACS is one of several companies under investigation amid a public outcry over the practice of back-dating stock options, where a grant price is set at a lower, more profitable level. According to Pool, “There has been no intentional backdating of stock option grants.”

On Wednesday, Vitesse Semiconductor Corp announced the firing of its chief executive and two other top executives amid a probe into the way it has accounted for stock option grants (See  Executives Fired over Stock Option Dating Issue ).