Louisiana Fund Lobs More Allegiations at Siebel

November 20, 2002 (PLANSPONSOR.com) - A public pension fund has expanded its lawsuit against Siebel Systems, claiming the CEO signed off on incorrect financial statements filed with the Securities and Exchange Commission.

The Teachers’ Retirement System of Louisiana has expanded upon  its September 23rd lawsuit , in which it alleged Siebel Systems’ board of directors gave company founder, CEO and chairman Tom Siebel, millions of stock options at or below market prices, rather than at a premium, as company rules required.  The suit also claims that Siebel was given, under certain circumstances, more options than allowed under the stock option plan rules 

The amended suit alleges the improperly issued stock options led to improper accounting that Siebel was aware of when he filed financial statements under the Sarbanes-Oxley Act.  

Siebel has received options to purchase 8 million shares of stock in each of the last three years.   As of February 28, 2002, Siebel’s stock and stock option holdings totaled 68.3 million shares, or 13.6% of the company.  

Exchange Program

The company  offered to exchange “underwater” employee stock options for cash or restricted stock in August; offering $1.85 cash for every option with an exercise price above $40.    If the total bill were to exceed $5,000, the employee was to receive a stock payout in the form of restricted stock.  

In a quarterly filing last week, the company said it would take a $650 million amortization charge for the exchange.