SAN FRANCISCO (AP) - A jury on Friday acquitted the former top lawyer at computer-security software maker McAfee Inc. of illegally tampering with his stock option grants to boost his pay package.
Kent Roberts, who served as McAfee's general counsel until he was fired in 2006, was charged with two counts of fraud and one count of falsifying accounting books. A jury on Friday found him not guilty on the fraud charges and couldn't come to a decision on the third charge.
Roberts was charged with illegally altering the price of 20,000 shares of stock options he was awarded in 2000 when the company was called Network Associates Inc. The change increased the value of the stock by nearly $200,000, but Roberts didn't sell the shares.
Federal prosecutors must now decide whether to retry Roberts on the false accounting charge. Assistant U.S. Attorney Laurel Beeler declined comment after the verdict was read.
"I would strongly recommend against pursuing this any further," U.S. District Judge Marilyn Hall Patel said after dismissing the jury, which deliberated for nearly three days after a two-week trial. "With no actual loss of money it's a little hard spending all the time and effort on this."
Patel also noted that Roberts lost his job over the issue.
Roberts declined comment and his lawyer Stephen Neal said only that they "were pleased with the verdict."
Roberts was only the third executive to go on trial over the so-called "backdating" of stock option awards and the first to be acquitted.
Former Brocade Communications Systems Inc. Chief Executive Gregory Reyes and the networking-equipment company's former personnel chief, Stephanie Jensen, were convicted last year after trials in San Francisco federal court. Both are appealing.
The scandal over improper options-related accounting led to investigations at hundreds of companies and criminal charges against 21 people, including executives at Broadcom Corp., Comverse Technology Inc., Monster Worldwide Inc. and Take-Two Interactive Software Inc.
Eight of those executives have pleaded guilty.
Roberts was originally charged with seven felonies in February 2007 including allegations that he altered the stock options prices for the company's former chief executive. But prosecutors whittled the case down to three counts by the time trial started Sept. 18 and focused solely on the single transaction in 2000.
During that same period, the company was also enduring an unrelated accounting scandal that involved a scheme to falsely inflate revenue to hide hundreds of millions of dollars in losses.
U.S. District Judge Susan Illston on Thursday sentenced the company's former chief financial officer Prabhat Goyal to one year and a day in prison after a jury convicted him in May 2007 of securities fraud.
Two of the company's former controllers pleaded guilty in the revenue-inflation scheme and the company's former CFO was convicted after a trial in that case. |