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| Monday, May 08, 2006 |
Comverse Tech stock falls amid probe
By Associated Press
Saturday, May 6, 2006 -
NEW YORK -- The stock of Comverse Technology Inc. fell Friday morning after the company said it received a subpoena from federal prosecutors over its stock option grants, which have already led to the resignation of three top executives.
Shares of the New York-based maker of telecommunications systems and software were down 91 cents, or 3.8 percent, at $23.12 on the Nasdaq Stock Market. The stock is down from a 52-week high of $29.64 set just before the company announced its own accounting probe in March.
In a regulatory filing Thursday, Comverse said it had received a subpoena from the U.S attorney’s office for the Eastern District of New York in connection with stock option grants made as far back as 1995.
Comverse said it intended to cooperate with the prosecutors. A Comverse spokesman did not return a call for comment. A spokesman for the U.S. attorney’s office said he could not confirm the subpoena or comment on it.
Comverse had earlier found that the strike prices of some options grants to employees were set on dates that differed from the recorded dates.
Employee stock options are usually priced according to the stock price on the day of the grant. If the stock price is low that day and then rebounds, the options become more valuable.
On Monday, Comverse said its chief executive, chief financial officer and general counsel resigned. Two weeks earlier, the company said it would delay filing its 2005 annual report and expected to restate results back to 2001 due to issues stemming from the timing of stock-option grants.
In Thursday’s filing, Comverse also said it had met with the Securities and Exchange Commission over its option grants, and it is facing several suits from shareholders.
Suspicious option-timing has been an issue at other companies as well. It led to the resignation of the top three executives at software company Mercury Interactive Corp. At UnitedHealth Group Inc., a committee is looking into option grants to its CEO, made on the best possible days of 1997, 1999, and 2000. |
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