Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Wednesday, February 28, 2007

SEC Charges Former McAfee GC

This morning the news was that Kent Roberts, former GC at McAfee, was indicted in connection with the stock options backdating scandal.  Today the SEC announced that it is charging him with fraud as well.  The Commission's complaint alleges that Roberts, secretly and without authorization, changed the grant date of a February 2000 grant made to him in order to take advantage of McAfee's then-declining stock price, which increased the potential value of his option grant by approximately $197,500. Roberts concealed his fraudulent re-pricing by filing false stock ownership reports with the Commission, and by failing to properly disclose in a McAfee proxy statement, which he signed, that the grant had been illicitly re-priced to confer a potential benefit of approximately $197,500 on Roberts.

The complaint also alleges that in 2002, Roberts, in his capacity as secretary of the compensation committee of McAfee's board of directors, falsified the minutes of a compensation committee meeting, and directed the company to issue a 420,000 share option grant to McAfee's chief executive a day later than the committee had directed. By re-dating the grant to a day after the committee's intended grant date, Roberts gave the chief executive a potential benefit of approximately $739,200, due to an intervening decline in McAfee's stock price. Roberts later signed a company proxy statement that misleadingly described the chief executive's option grants, and failed to disclose that the CEO had received an extra $739,200 of potential value due to the unauthorized re-pricing.

SEC Action | Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference SEC Charges Former McAfee GC:


Post a comment