They originally scheduled sentencing on MLK holiday, so it happened today. 6 months and $1 million fine.
siliconvalley.com
Former SafeNet CFO sentenced in options backdating probe
Associated Press
Article Launched: 01/28/2008 10:45:23 AM PST
NEW YORK - The former chief financial officer of network security products maker SafeNet Inc. was sentenced Monday to six months in prison and fined $1 million on securities fraud charges in the backdating of millions of dollars of employee stock options grants.
The judge told Carole Argo she was deserving of leniency because of her charitable deeds and because her crimes were not nearly as serious as those committed in some of the more spectacular financial frauds of the past decade. He also said a stern message was being sent with the fine.
Before she was sentenced, Argo, 46, of Baltimore, sobbed and said: "My apologies to everyone who was harmed by this." The courtroom was packed with her family, friends and a dozen employees of SafeNet, including its president and chief lawyer.
U.S. District Judge Jed S. Rakoff said federal sentencing guidelines in the case called for a prison term of between nine and 10 years. The federal probation office had recommended a sentence of nearly five years.
Paul Engelmayer, her lawyer, said she had already given back $236,000 in profits. He said it was unlikely she could afford the $1 million fine.
In October, Argo pleaded guilty to securities fraud, admitting that she backdated millions of dollars worth of employee stock option grants at SafeNet.
Federal prosecutors said she conspired with others to routinely backdate options grants so that they appeared to have been issued when SafeNet's stock price was at a periodic low point.
The practice at SafeNet and other companies resulted in a series of federal indictments involving the backdating of options, awards which were guaranteed to be exercised at favorable prices.
As a result, Argo and others could use the options as "free" compensation that did not reduce the company's earnings, prosecutors said.
The government said backdating at the company occurred between 2000 and 2006. In October 2006, the company's top officers, including its president, chief operating officer and Argo, resigned. |
