Wednesday, January 23, 2008
The SEC announced a settled enforcement action against Andrew J. McKelvey, the former Chief Executive Officer of Monster Worldwide, Inc., for his participation in a multi-year scheme to secretly backdate stock options granted to Monster officers, directors and employees. Although McKelvey did not receive backdated options, he benefited from the scheme by granting backdated options to four individuals he personally employed, including three pilots and a mechanic. Under the settlement, McKelvey will pay $275,989.72 in disgorgement and prejudgment interest, will be barred from serving as an officer or director of a public company, and will be enjoined from violations of the anti-fraud, reporting and other provisions of the federal securities laws. McKelvey agreed to the settlement without admitting or denying the allegations in the complaint.
The SEC alleged that, beginning in 1997, McKelvey backdated stock option grants to coincide with the dates of low closing prices for the Company's common stock, resulting in grants of in-the-money options to numerous individuals. McKelvey understood that backdating options to coincide with low closing prices for Monster stock without recognizing a compensation expense was contrary to accounting rules and contrary to representations in Monster's SEC filings. McKelvey also caused Monster to misrepresent in its periodic filings and proxy statements filed with the Commission that all stock options were granted at the fair market value of the stock on the date of the award and caused Monster to overstate its aggregate pretax operating income by approximately $339.5 million, for fiscal years 1997 through 2005.