Thursday, August 2, 2007
High tech circuit manufacturer Integrated Silicon Solution, Inc. (ISSI) and its former chief financial officer settled SEC civil fraud charges related to options backdating at the company from 1997 through 2005. According to the SEC Litigation Release (here):
The Commission's complaint against ISSI and Fischer, filed in the Northern District of California, alleges that Fischer routinely used hindsight to select option grant dates when ISSI's stock traded at or near monthly or quarterly lows, and at prices below the closing price on the date when Fischer actually selected the grant date. According to the complaint, the dates Fischer selected were then incorporated into Stock Option Committee resolutions and Compensation Committee minutes, even though the committees rarely, if ever, met on the date listed on the minutes and resolutions.
The former CFO paid $414,830 in disgorgement and a civil penalty of $125,000. In what may be a trend in SEC settlements in the options backdating cases, the company settled the case by agreeing to an injunction but will not pay any civil penalty, similar to the recent resolution of options backdating charges involving Silicon Valley company KLA-Tencor. (ph)