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

To: Glenn Petersen who wrote (135)	2/24/2007 9:15:57 PM
From: RockyBalboa	Respond to of 165

KB Home, this is a vulnerable sector: (Already reported earlier: Message 23028174 ) Feds peek into KB Home options No. 5 U.S. home builder says it is cooperating with agency; separately, former HR chief has been asked to speak with prosecutors. February 23 2007: 7:29 PM EST NEW YORK (Reuters) -- KB Home, the No. 5 U.S. home builder, said on Friday the Justice Department was looking into past stock options practices at KB, but added the agency said KB was not a target of the investigation. "KB Home has and intends to fully cooperate with any government agency looking into this matter," the company said in a statement. Separately, Mark Beck, an attorney for former KB Home human resources chief Gary Ray, said in a telephone interview that prosecutors had asked to speak with Ray and other former executives as part of a stock options probe. Beck said his client has done nothing wrong. >>>>>> Luxury builder: Home rebound not here yet <<<<<< The Securities and Exchange Commission started looking into the company's stock options practices last August. Last November, following an internal investigation by KB Home into its stock options practices, Chairman and Chief Executive Bruce Karatz abruptly retired, Ray was fired and Richard Hirst, the company's chief legal officer, resigned. At that time, KB Home said that based on an internal investigation into stock options backdating, its "board of directors concluded that Mr. Karatz and Mr. Ray selected grant dates under the company's stock option plans." Backdating of options allows the holder to reap a greater profit when the option is exchanged. KB has said the practice occurred from 1998 to 2005. Shares of KB (Charts) closed Friday down 1.8 percent at $51.60. Homebuilders have had a rough week in the market. KB is off 5.8 percent; Centex (Charts) has fallen 6.5 percent; D.R. Horton (Charts) is down 4.5 percent; and Pulte Homes (Charts) has shed 4.3 percent. money.cnn.com

To: Glenn Petersen who wrote (135)	2/27/2007 8:29:47 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 165

Chickens come home to roost? And here is a phenomenon which partly helps explaining why the market simply ignored options problems - till now: >>>>> Perhaps the most remarkable sign of the recent irrational exuberance underpinning China’s stock markets is that during the past year, when a company has announced bad news, its stock price has been shooting through the roof. Early this year, for instance, when a group of 17 Chinese companies was cited by regulators for misappropriating corporate funds, their stock prices all skyrocketed. When the Tianjin Global Magnetic Card Company failed to report quarterly earnings last April, its stock doubled. ... Analysts say that at least in some cases, the stocks of tainted companies have risen because the companies were viewed as shedding old problems and starting anew. Still, some of these problems reflect deep cultural attitudes and are unlikely to be fixed overnight. ... But in this current run of market mania, even corruption appears to be a buy signal. That was the case for the Shanghai Bailian Group, which reported on Dec. 29 that its chairman was under investigation for fraud. The company’s shares have climbed 45 percent since then. <<<<<< Message 23325385