by CIO Staff

Juniper to Take $900M Charge for Backdating Options

News
Dec 21, 20062 mins
Outsourcing

Juniper Networks will take a non-cash charge of about US$900 million in the wake of an investigation that found the company improperly dated employee stock-option grants.

The router and network security vendor on Wednesday announced the completion of a seven-month probe by its audit committee, assisted by independent counsel and forensic accountants. The investigation found that in many cases, Juniper chose grant dates for options after the fact, in an effort to give employees the benefit of a better stock price.

Concerns about the backdating of stock options have haunted many high-tech companies over the past year as improper accounting practices, mostly used during the dot-com boom, were uncovered. At Juniper, 99.9 percent of the charges relate to options granted between June 1999 and the end of 2003, according to the company.

The investigators also found Juniper management didn’t exercise enough responsibility for the company’s stock option process, and said it had serious concerns about former management. But in a statement Wednesday, the audit committee and board of directors backed Chief Executive Officer Scott Kriens and the current management. Kriens received two option grants with date issues, but they were not exercised and were canceled in 2001, the company said.

Juniper also said it intends to catch up on filing quarterly financial results for 2006 and restatements of previous results in the first quarter of 2007, fulfilling a deal with the Nasdaq to remain listed on the market.

-Stephen Lawson, IDG News Service (San Francisco Bureau)

Related Links:

  • Apple: CEO Steve Jobs Knew of Backdating

  • Three Ex-Brocade Execs Charged in Stock Options Probe

Check out our CIO News Alerts and Tech Informer pages for more updated news coverage.