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

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Wednesday, April 30, 2008

SEC Charges Two Former Monster Worldwide Officers with Backdating

The SEC today charged two former senior executives at Monster Worldwide, Inc., for their alleged participation in a multi-year scheme to secretly backdate stock options granted to thousands of Monster officers, directors and employees.  The SEC alleges that Monster's former president and chief operating officer James J. Treacy and former controller Anthony Bonica participated in a scheme that began in 1997 to fraudulently backdate stock options to coincide with the dates of low closing prices for the New York-based company's common stock.  As a result of their conduct, Monster misrepresented that all stock options were granted at the fair market value of the stock on the date of the award and also filed materially misstated financial statements in its Forms 10-K and 10-Q that did not recognize compensation expense for the company's stock option grants.  As a result, Monster overstated its aggregate pre-tax operating income by approximately $339.5 million for fiscal years 1997 through 2005.

The SEC's complaint further alleges that Treacy and Bonica personally benefited from the fraudulent scheme by receiving and exercising backdated grants of in-the-money options.  The Commission is seeking permanent injunctive relief, disgorgement of ill-gotten gains and financial penalties from each defendant, as well as an officer and director bar against Treacy.

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