Former McAfee counsel indicted
in stock option backdating case
Screen shot courtesy McAfee,
By Julia Cheever, Bay City News Service
February 28, 2007
SAN FRANCISCO (BCN) - The former general counsel of McAfee
Inc., a computer security company based in Santa Clara, was indicted
by a federal grand jury in San Francisco Tuesday on seven charges
related to allegedly fraudulent backdating of stock options.
Kent Roberts, 50, of Dallas, is scheduled to be arraigned before
a federal magistrate in San Francisco on Thursday.
He is accused in the indictment of changing the dates of stock
option grants in 2000 and 2002. The company was known as Network
Associates at the time.
Roberts was fired by the company's board of directors last May
The company said that in a review of grants of employee stock
options, it had found one "improper episode" involving
Roberts in 2000.
The case is part of a nationwide U.S. Justice Department probe
of possible backdating of options by 80 companies.
The first people to be charged in the investigation were two
former executives of San Jose based Brocade Communications Systems
Inc. last summer.
Backdating of an option to buy a company's stock enables employees
to buy stock at a lower price and thus at a higher profit. Backdating
in itself is not illegal, but making false statements about it
Roberts was charged with two counts of mail fraud, one count
of wire fraud, three counts of filing false statements with the
U.S. Securities and Exchange Commission, and one count of falsifying
the records of Network associates.
Scott Schools, the new U.S. attorney for Northern California,
said, "It is integral to the public trust in our financial
markets that transactions affecting a company's financials are
recorded honestly, particularly by those who are responsible for
Roberts's attorney, Stephen Neal of Palo Alto, issued a statement
saying, "We intend to vigorously defend the charges against
Mr. Roberts but have no further comment at this time."
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