We found this article on Topix.net
Monster Director Resigns Over Probe
A board committee conducting an internal investigation had sought to interview him further following a meeting in July. Monster also has received a subpoena from the U.S. attorney’s office in the Southern District of New York over stock options.
McKelvey, who is 71, is the latest casualty in a widening scandal over the accounting of past options grants. In all, at least 135 U.S. companies have disclosed internal inquiries or government investigations and at least 39 executives and board directors at 19 companies have been fired or resigned.
McKelvey’s resignation comes weeks after he stepped down from the posts of chairman and chief executive on Oct. 9. At that time, he retained a board seat and was named as a chairman emeritus.
Other top executives who have recently resigned over options investigations include: UnitedHealth Group Inc. founder William McGuire, KLA-Tencor Corp. Chairman Kenneth Levy, CNET Networks Inc. Chief Executive Shelby Bonnie and McAfee Inc. CEO George Samenuk.
Monster issued a statement Monday disclosing that, through a lawyer, McKelvey declined to be interviewed by a special committee of the board in a meeting that had been set for Monday. He also would not assure the board that he would appear at a later date.
A lawyer for McKelvey wrote in a letter that the former executive refused to meet because he did not have sufficient time to review the facts of what had happened over the course of several years. Attorney Steven Reich also clarified answers McKelvey gave in a July meeting, arguing that McKelvey did not know backdating was illegal.
‘He did not understand that it was improper for the exercise price of stock to be different than the price on the grant dates, nor did he understand there were legal or accounting implications associated with that difference,’ Reich wrote in the letter.
The company’s ongoing internal investigation had also delayed the release of its latest quarterly earnings results and led to the suspension of Myron Olesnyckyj, who was senior vice president, general counsel and secretary for the company.
Shares of Monster Worldwide fell 32 cents to $39.97 on the Nasdaq Stock Market in morning trading.
We have all seen a lot of news print about the the alleged illegality of back dated stock options. Corra is sure some of these incidents will find themselves as cases in criminal and civil court, featuring high profile executives and their associates. The thing is what if one of these executives or, especially, one of their lesser known executives in search of another job applies at your business?
It is possible that if that executive is involved in laws suits, some of his legal troubles can spill over into your company. You as the HR Manager or a Business owner can find yourself involved in a drama you didn’t create. You may even have to hire your own attorneys to make sure sharp civil attorneys don’t figure a way to attach some of the litigation procedures to your business.
At the very least, you might be faced with an executive who is in court more than in your office. He will most certainly be distracted by the litigation, meetings with his attorneys and the pressures of either going to jail or paying heavy fines and civil awards. This is not to even address the fact that someone involved in scandal can prove embarrassing to your company.
Corra believes executive background searches should include Federal Criminal and Federal Civil searches as well as the more standard criminal and credit reports. The Federal Criminal and Civil Searches will make you aware of a candidate’s white collar crimes. For the most part you will not find your new financial person is a kidnapper or a counterfeiter, but white collar crimes are a whole different matter.
So no matter how experienced, educated or refined they are, Corra believes you should do the extra due diligence and check them out before your hire.
