SEC Slaps Former Monster Execs with Options Backdating Charge

May 1, 2008 ( - A federal indictment in New York has charged the ex-chief operating officer and ex-controller of employment Web site Monster Worldwide with stock options backdating between 1997 and 2003.

A Securities and Exchange Commission (SEC) news release said the charges were leveled against former president and chief operating officer James J. Treacy and former controller Anthony Bonica. According to the SEC charges, the two men participated in a scheme to grant options without Monster properly describing its options practices in its public filings or properly accounting for these options in its financial statements (See Ex-Monster Chief Admits to Options Backdating Allegations ).

As a result of their conduct, Monster misrepresented that all stock options were granted at the fair market value of the stock on the date of the award, the SEC said.

Monster also filed misstated financial statements in its Forms 10-K and 10-Q that did not recognize compensation expense for the company’s stock option grants, as required by generally accepted accounting principles. As a result, Monster overstated its pre-tax operating income by approximately $339.5 million for fiscal years 1997 through 2005, according to the SEC.

“These defendants circumvented disclosure requirements and accounting principles designed to provide investors with an accurate picture of a company’s performance. Our enforcement action today demonstrates yet again that the Commission will not tolerate deception of investors through unlawful options backdating and will aggressively pursue those responsible,” said Linda Thomsen, Director of the SEC’s Division of Enforcement, in the news release.

More information about the SEC allegations is available here and here