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Thursday, Mar 28, 2024

Investigation Finds Ex-Vitesse Execs Manipulated Stock Options

Former senior management with Vitesse Semiconductor Corp. improperly backdated the dates of stock options over a number of years, a special committee to the company’s board reported Tuesday. The backdating resulted in lower exercise prices for the stock options. The same former executives tried to conceal the backdating by creating or altering documents, the committee’s report said. The backdating scheme is expected to cost the Camarillo-based company as much as $120 million, the special committee reported. The committee’s investigation was the result of an ongoing probe by the U.S. Securities and Exchange Commission into improperly awarded stock options. Vitesse is one of several San Fernando Valley companies under investigation. The company is not releasing the names of the former management involved with the backdating of the options. However, in May, CEO Louis R. Tomasetta, Chief Financial Officer Yatin Mody, and Executive Vice President Eugene F. Hovanec were terminated from the company. (Tomasetta continues to serve on the Vitesse board of directors.) The special committee found no evidence that any current board members other than Tomasetta were aware of the improper practices or benefited from them. The Nasdaq National Market delisted Vitesses common stock in June because the company failed to file financial reports for the quarter ending March 31.

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