Former Juniper Lawyer Faces Backdating Charge
Juniper Networks has been caught up in the stock options backdating scandal as a former general counsel for the network equipment company is charged with violating the U.S. Securities and Exchange Commission accounting rules.
Simultaneously, the SEC announced that it has settled civil charges against Juniper over the violations, without Juniper admitting or denying the allegations. Civil charges had already been settled regarding KLA-Tencor, a semiconductor maker for whom Berry worked before joining Juniper.
At both companies, Berry allegedly routinely backdated stock options for employees between 1997 and 2003. Backdating isn't illegal, but if the practice is not properly accounted for and disclosed to shareholders, that's considered fraud.
Backdating is the practice of changing the date on which stock options were issued to an employee to an earlier date when the stock price was lower than on the date they were actually issued. That way, when the employee exercises his option, he makes more of a profit from the company's stock.
The backdating attributed to Berry resulted in Juniper and KLA-Tencor each having to restate financial results, the SEC said. Juniper took a $900 million charge against its earnings this year for undeclared options expenses in 2003. KLA also overstated its net income by as much as 47 percent in 1998 and 1999.
More than 100 U.S. companies, mostly technology firms, have been investigated and/or charged with backdating or individual executives were. Companies touched by the scandal include Apple, Brocade Communications and Broadcom.