Friday, May 19, 2006

The List of Grand Jury Subpoena Recipients in the Options Pricing Probe Keeps Growing

Add three more companies to the list of those that have received grand jury subpoenas from the Southern District of New York probing the pricing of stock options granted to senior executives, including the veracity of documents for the awards.  The subpoenas, all delivered on Wednesday, May 17, were received by Affiliated Computer Services, Inc. (8-K here), Caremark Rx, Inc. (press release here), and SafeNet, Inc. (press release here).   Each company also disclosed receiving an inquiry from the SEC as part of its informal investigation -- which will go formal sometime soon, I expect -- and each states that it will cooperate in the investigation.  UnitedHealth and Vitesse Semiconductor also received subpoenas on that day (see post here), and no doubt there will be more companies disclosing the receipt of grand jury subpoenas, with the disclosures likely to come late Friday afternoon after the markets close.  It is not clear whether the SEC requests for information were received at the same time as the grand jury subpoenas, but the Commission and the Southern District of New York have a long history of close cooperation so these investigations most likely are being coordinated.  A Wall Street Journal story (here) discusses the expanding investigation. (ph)

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Fraud, Grand Jury, Investigations, Securities | Permalink

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