Ex-Monster GC faces jail sentence as stock options scandal rumbles on
A group of high-profile general counsel have found themselves in the firing line as the share options scandal currently dogging corporate counsel continues across the US. In the latest chapter of the controversy, employment giant Monster's ex-general counsel, Myron Olesnyckyj, has pleaded guilty to criminal charges involving stock-option backdating and tech-company BEA Systems general counsel Bob Donohue has been demoted.
February 21, 2007 at 10:08 PM
3 minute read
A group of high-profile general counsel have found themselves in the firing line as the share options scandal currently dogging corporate counsel continues across the US.
In the latest chapter of the controversy, employment giant Monster's ex-general counsel, Myron Olesnyckyj, has pleaded guilty to criminal charges involving stock-option backdating and tech-company BEA Systems general counsel Bob Donohue has been demoted.
Olesnyckyj pleaded guilty to the charges last Thursday (15 February), making him the second lawyer to be charged with criminal offences relating to improper share options backdating after William Sorin, former general counsel at Silicon Valley technology company Comverse, was fined $3.1m (£1.6m) last month.
Olesnyckyj was fired from the online employment company in November following an internal probe into stock options
award practices.
He could now face jail and fines of more than $5m (£2.3m). The civil action brought by the Securities and Exchange Commission (SEC) against Olesnyckyj for fraud and reporting violations has yet to be resolved.
A spokesperson for the SEC said: "By backdating the vast majority of the stock options it granted, Monster used the lure of instant paper profits to attract and retain its employees. Olesnyckyj knew that backdating was wrong but nevertheless went along with the scheme. Any lawyer who works at a public company should do everything possible to thwart fraud – not participate in it."
Meanwhile, tech-company BEA Systems, one of the world's leading infrastructure software companies, has demoted general counsel Bob Donohue as the result of an internal investigation into share options backdating at the company.
Donohue, one of a number of senior executives at the company to be demoted, has been stripped of his title of general counsel but will remain at the company as vice president of the legal department. BEA is currently subject to an external investigation by the SEC.
Olesnyckyj's guilty plea and Donohue's demotion come as McAfee's former general counsel, Kent Roberts, also looks set to be hit with stock options-related criminal charges. He was fired from the company last May for his involvement in improper stock option grant practices.
The developments mark the latest in a series of high-profile general counsel departures relating to share options scandals, which have so far hit more than 150 US companies. General counsel at companies including Apple, CNET and Hewlett-Packard have resigned and have since been connected to investigations into backdating.
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