Ex-Monster Chief Admits to Options Backdating Allegations
The Wall Street Journal reported that Andrew McKelvey made the admission to securities fraud and conspiracy charges in a Manhattan federal courtroom. McKelvey also acknowledged signing “misleading financial statements,” during his plea.
Federal prosecutors agreed to defer prosecution for the 73-year-old McKelvey and to drop the charges in a year if McKelvey stays out of trouble, the newspaper said. Their leniency was due to McKelvey’s illness and the fact that it was unclear if he would live long enough to face a trial.
The charges against McKelvey grew out of a federal investigation of options backdating at Monster. Prosecutors said the fraud caused the company to understate pretax compensation expenses by $339 million from 1997 through 2005 (See Monster Inc. Earnings Dive $217.9M From Options Backdating ).
McKelvey reached a settlement with the Securities and Exchange Commission (SEC) in which he will pay about $276,000. As part of a separate settlement with Monster, McKelvey will repay $8 million and will convert his super-voting B shares into A shares.
McKelvey stepped down as CEO and chairman in October 2006, after declining to be interviewed by company lawyers probing the backdating matter.
Monster’s former general counsel, Myron Olesnyckyj, pled guilty early last year to federal criminal charges tied to the backdating and agreed to cooperate against McKelvey and other former officials (SeeMonster Exec Pleads Guilty to Backdating Charges ).
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