According to the announcement, on May 16, 2006, the Center for Financial Research and Analysis issued an analysis of stock option exercise prices relative to stock price ranges for certain companies during the period 1997 to 2002. The report identified CNET as having granted stock options on four occasions between 1998 and 2001 with exercise prices that matched or were close to a 40-day low for its stock price.
CNET’s Board of Directors has appointed a special committee to conduct an internal investigation relating to past option grants, the timing of such grants and related accounting matters, the announcement said. The committee is being assisted by independent legal counsel.
CNET joins a growing list of companies that are having their stock option practices investigated by the SEC (See Investigation Widens into Stock Option Backdating ). Lawsuits against UnitedHealth by public pension funds have been filed since it announced the SEC was investigating its stock option grants and it may have to restate financial results (See UnitedHealth Sued Again Over Option Dating Allegations).