Microtune Concludes Stock Options Probe
By Colleen Taylor -- EDN, December 29, 2006
Plano, Texas-based RF chip maker Microtune Inc. said this week it has wrapped up its stock option investigation, finding evidence of illegal backdating but "no intentional wrongdoing" by its current CEO, CFO, general counsel, or board of directors.
Microtune initiated the internal stock options review in July, amid growing controversy in the tech industry regarding the fraudulent backdating of stock options. The review included all stock option grants from the company's IPO in August 2000 through June 30 2006.
The review has uncovered that, as the company had expected, Microtune will indeed have to restate certain financial statements and related footnote disclosures during years 2001 through 2005, and Q1 2006. And the company will certainly pay for its past indiscretions: Microtune said the total cost of the investigation should set it back in excess of $2 million. According to the company, however, some 85 percent of the stock-based compensation charges resulted from backdating that occured prior to August 12, 2003—when its current CEO, James Fontaine, took the company's helm.
"As a result of the investigation, we believe that we have taken necessary steps to ensure that the company adopts and maintains appropriate controls in its equity award processes, and complies fully with all relevant accounting practices," Fontaine said this week in a statement.
While many others have not been so fortunate, Fontaine is not the only exec to recently emerge unsullied from an otherwise damning stock options probe. Apple Computer's CEO Steve Jobs was similarly cleared this week, even though the company's internal investigation revealed evidence of backdating the need for some $84 million in compensation expenses.
