Linear: No Options Misconduct
By Jessica Davis -- EDN, September 12, 2006
Linear Technology has completed its internal investigation of stock option backdating and found no issues, a spokesman has confirmed.
The Milpitas, Calif.-based company filed its annual report on the Form 10-K on time last week, spokesman John Hamburger noted. And in that document, Linear puts questions about its options investigation to rest.
"The company reviewed its historical option-granting practices and option grants with the assistance of outside counsel and an independent forensic accounting firm," Linear said in the report. The review covered the calendar years 1995 through 2006. "Based on the findings of the review, the company has concluded that there is no need to restate any previously filed financial statements. The review found no evidence of fraud or misconduct of any kind in the Company's practices in granting of stock options.
Linear further noted that any allegations against the company of such actions were largely based on statistical analyses where the underlying premise is that daily stock prices are essentially random.
"However, as is common with high growth technology companies, the company's stock price is more volatile at and around earnings release dates," Linear added in the report. "The company granted its stock options on a quarterly basis in connection with its regularly scheduled board meetings. Board meetings are scheduled far in advance to coincide with the company's quarterly earnings releases. The company did not employ backdating."
The 10-K filing won over at least one Wall Street analyst.
"The timely 10-K filing highlights the strong credibility of Linear's management team," said Craig Hettenbach, an analyst covering equity research of the semiconductor sector for Wachovia Securities. "The company's management, including founder and Chairman of the Board Bob Swanson has been vocal in emphasizing that stock options backdating is not a practice at Linear."
Linear is one of many companies that has faced increasing scrutiny of its stock option grant dating practices.
Several companies last week, including Linear, became the subject of an IRS investigation into the matter.
Shares of Linear were up 1.5 percent, or 49 cents at the close of trading on Monday.
