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Strategies & Market Trends : Option Granting Practices and exploits -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (47)	10/2/2006 5:17:35 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 165

Here is a recent victim, mentioned earlier: MRVL. A double whammy. Weak outlook + options problems. It begins to remind me on Brocade. In Afterhours trading, Marvell goes down hard losing 3.50 to under 16. Note that also Broadcom and other stock is mentioned and there shall be some fallout in Q3. [http://www.siliconinvestor.com/readmsg.aspx?msgid=22625367&srchtxt=Marvell ] Monday October 2, 4:49 pm ET Marvell Technology Sees Weaker 3Q Sales, Plans to Restate Results Due to Options Probe SANTA CLARA, Calif. (AP) -- Marvell Technology Group Ltd., a maker of circuits for data storage and broadband communications, on Monday said it expects its fiscal third-quarter sales to slide 10 percent quarter over quarter. Separately, the company also said it plans to restate past financial results after a probe into its historical stock option practices turned up discrepancies. The actual measurement dates for financial accounting purposes of certain stock option grants differ from the recorded grant dates, Marvell said. The company said it has not yet determined the amount of the additional charges or in which past quarters they'll be booked. Financial statements dating back to June 2000, when the company went public, should not be relied upon, the company said. Marvell forecast third-quarter sales of $574 million, down from the second quarter due to sluggish demand from hard disk drive customers. Weaker-than-normal seasonal shipments in the personal computer market and excess inventory held by some storage customers contributed to the market softness, Marvell said. Marvell also said it sees "a significant increase" in general and administrative expenses during the quarter, as the costs of its internal stock options review were higher than expected. In a statement, President and Chief Executive Sehat Sutardja called the revenue decline "as a short-term event." Marvell Technology shares fell 28 cents to close at $19.09 on the Nasdaq.

To: Glenn Petersen who wrote (47)	10/25/2006 7:31:15 AM
From: Glenn Petersen	Read Replies (2) \| Respond to of 165

The first guilty plea from a Comverse executive: Former Comverse executive admits fraud, will aid probe October 25, 2006 BY TOM HAYS NEW YORK -- A former executive with leading voicemail software maker Comverse Technology Inc. pleaded guilty to conspiracy and securities fraud Tuesday after agreeing to cooperate in the investigation of a scheme to make millions of dollars by manipulating stock options. Former head of finance David Kreinberg told a federal judge in Brooklyn that he conspired with former chief executive Jacob ''Kobi'' Alexander to backdate the options and to falsify financial statements to conceal the fraud from shareholders. ''Your honor, I knew at the time that my actions and agreements with others at the company ... were wrong,'' he said. He faces up to 15 years in prison at sentencing on Feb. 23. He also could be ordered to pay tens of millions of dollars in restitution. Kreinberg, 41, and former senior general counsel William Sorin surrendered in August and were released on $1 million bond each. Alexander, meanwhile, became the target of an international manhunt. Before he disappeared, Alexander, 54, an Israeli citizen and a U.S. permanent resident, allegedly transferred $57 million to Israel. He was located last month in the Republic of Namibia in southwest Africa, where he was briefly detained before being freed on bail pending a ruling on an extradition request by U.S. authorities. In a sworn statement filed in Namibia, Alexander said he had been living openly with family in the desert country since July. After transferring $16 million from Israel to Namibian banks, he bought a $500,000 home and began investing in local business ventures, he said. Prosecutors allege Alexander, Kreinberg and Sorin made stock options more lucrative by backdating their exercise price to a low point in the stock's value. Usually, a stock option's exercise price coincides with the market value at the time of a grant to give the recipient an incentive to drive the price higher. ''The company was in fact issuing backdated options with an exercise price lower than the fair market value on the grant date,'' Kreinberg said during his plea. ''After learning this, I agreed with the CEO and others at the company to assist them in continuing the practice.'' AP Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. suntimes.com