Thursday, March 10, 2011

Second Circuit Decision on Former COO & President of Monster

The second circuit court of appeals issued this opinion affirming in part (the convictions) and vacating in part (the forfeiture order) of defendant James J. Treacy, former COO and President of Monster Worldwide, Inc. The court stated:

"(1) that the district court erred under the Confrontation Clause in limiting Treacy’s cross-examination of a Wall Street Journal reporter on the grounds of the journalist’s privilege, but that the Government has shown beyond a reasonable doubt that the error was harmless; (2) that the district court did not abuse its discretion in declining to ask prospective jurors certain questions requested by the defense; and (3) that the district court committed clear error in determining the forfeiture amount with respect to one of the option grants, requiring vacatur and remand for recalculation and entry of a new forfeiture order."

The court noted:

Treacy, who left his position as an officer in 2002 and left Monster’s board in 2003, was one of several Monster officials implicated in a long-term conspiracy to backdate stock options at the company and obtain favorable strike prices for the officials and others while creating the false appearance that the options had been granted at fair market value.Treacy was indicted in August 2008 on: (1) one count of conspiracy to commit securities fraud, file false reports with the Securities and Exchange Commission ("SEC"), make false statements to auditors, and falsify books and records, in violation of 18 U.S.C. § 371; and (2) one count of substantive securities fraud, in violation of 15 U.S.C. §§ 78j(b), 78ff, 17 U.S.C. § 240.10b-5, and 18 U.S.C. § 2. A jury found Treacy guilty on both counts, and in September 2009 the district court (Rakoff, J.) sentenced Treacy principally to 24 months’ imprisonment and ordered him to pay restitution and forfeiture in the amount of $6,332,995. 


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