While at Pw C, Professor Cedergren also worked on several stock option backdating investigations and related financial restatements, including those of Mercury Interactive, Marvell Technology Group, and Trident Microsystems.Professor Cedergren obtained his Ph D from the New York University Leonard N.Professor Cedergren’s research interests also include initial public offerings, accounting issues in high-tech firms, and the capital market effects and information content of accounting measures.Prior to his academic career, Professor Cedergren spent six years in the Assurance practice of Pricewaterhouse Coopers LLP in San Jose, California, where his responsibilities included financial statement audits and Sarbanes-Oxley compliance for semiconductor clients in Silicon Valley. Y.) A securities class action on behalf of certain shareholders and bondholders of Lehman Brothers Holdings Inc.’s (“Lehman”) in connection with untrue statements and omitted materials facts regarding, among other things, Lehman’s use of undisclosed repurchase and resale transactions, failures to adhere to risk limits, and misstatements concerning Lehman’s concentration of mortgage and real estate-related assets, preventing investors from meaningfully assessing Lehman’s exposure to these risky assets. On March 31, 2011, the court issued an Opinion and Order substantially denying Defendants’ motions to dismiss. Eventually, Marvell conceded that it understated the effect of its compensation expense and overstated net income. Cal.) A securities class action alleging that Defendants engaged in repeated violations of federal securities laws by backdating options grants to top executives and falsifying the date of stock option grants and other information regarding options grants to numerous employees from 2000 through 2004, which, ultimately, caused Brocade to restate all of its financial statements from 2000 through 2005. Y.) A class action on behalf of certain Wachovia debt holders alleged that Wachovia sold more than billion of bonds to investors in a series of public offerings while misrepresenting the true nature and quality of Wachovia’s “Pick-A-Pay” Option ARM mortgage loan portfolio, and Wachovia’s exposure to billions of dollars of losses in mortgage-related assets. Y.) A case alleging artificial inflation of stock prices due to improper laddering and the payment of excessive commissions to secure IPO stock allocations during the 1990s’ “dot-com” boom. A 0 million class-action settlement against auto-parts manufacturer Delphi Corporation (reduced as a result of bankruptcy), including an additional million recovery against Delphi’s outside auditor. (“Marvell”) and three executive officers, involving an alleged options backdating scheme from June 2000 through June 2006, which enabled Marvell’s executives and employees to receive options with favorable option exercise prices selected with the benefit of hindsight, violating Marvell’s stock option plan while avoiding hundreds of millions of dollars in compensation expenses on Marvell’s books.
The information is intended only for the use of the individual(s) or entity(ies) addressed in this e-mail transmission.Downs led a team of lawyers who successfully prosecuted over 65 stock option backdating derivative actions in federal and state courts across the country, resulting in hundreds of millions in financial givebacks for the plaintiffs and extensive corporate governance enhancements, including annual directors elections, majority voting for directors and shareholder nomination of directors.Notable cases include: , an action alleging that Google facilitated in the improper advertising of prescription drugs.The question: did these companies backdate options grants – and falsify records – to make them more lucrative for their top employees?Or did a lot of CEOs just have amazingly good luck?
By failing to include these options in their books, companies may be overstating their profits – and may, ultimately, have to restate their financials.