Cablevision Backdated Options for Deceased Exec

September 22, 2006 ( - Cablevision Systems Corp. backdated a stock options grant for a vice chairman who was deceased so it would seem the grant was awarded when he was living, an investigation has found.

The Wall Street Journal reports that a Securities and Exchange Commission filing also said the investigation found the cable operator awarded options to a compensation consultant, accounting for them as if they were awarded to an employee. The filing cites the results of an investigation by an outside law firm.

The firm restated financial results and announced two directors had stepped down from committee posts as a result of the continuing investigation into its stock option practices, according to the WSJ. The company also announced receipt of a grand jury subpoena from the US Attorney for the Eastern District of New York.

The company restated earnings for 2003 through the first quarter of 2006. The impact of the improper options dating and other non-cash compensation items, from 1997 to March 2006, decreased net income in that period by a total of $89.2 million.

The recent filing did not say how many options were backdated or who received the grants, but earlier filings said Cablevision awarded at least 2.9 million options from 1997 to 2002 to at least five executives, including Chief Executive James Dolan and to Marc Lustgarten, the vice chairman who died in 1999.