Ex-Monster Executive Pleads Guilty in Options Case
A former senior vice president of the company that runs the Monster job search Web site pleaded guilty Thursday to conspiracy and fraud charges.
Myron Olesnyckyj, 45, of New Providence, N.J., faces up to 25 years in prison and fines of more than $5.2 million after pleading guilty to securities fraud and conspiracy to commit securities fraud. His guilty plea occurred as part of a cooperative agreement in which he promised to cooperate fully in return for leniency.
Olesnyckyj's expected plea was first reported by CNBC.
Olesnyckyj said his crimes occurred between 1996 and 2006, when he agreed with others at the company to backdate options and hide it from federal regulatory agencies and investors. He agreed to forfeit $381,000 which he said was the amount of money he gained from the scheme.
The Securities and Exchange Commission today filed a civil complaint against Olesnyckyj for securities fraud in connection to backdating.
The charges were the first for a Monster executive related to the backdating scandal at the company, which overstated the value of its earnings by more than $250 million between 1997 and 2005. Backdating involves issuing stock options retroactively to coincide with low points in the share price, thus boosting payouts. It can be illegal if it is not properly accounted for and disclosed to investors.
Monster Worldwide , whose job site competes with newspaper classifieds, is among scores of companies whose stock options backdating practices have been investigated by federal authorities.
The company announced in July 2006 it might need to restate its finances to record additional charges for stock options expenses, and then in September it said it had suspended Olesnyckyj, who also was general counsel and secretary, while it reviewed past stock options grant practices. It dismissed him two months later.
In October, Monster said former Chief Executive Officer Andrew J. McKelvey had resigned from its board after refusing to be interviewed about the company's past stock options practices. A board committee conducting an internal investigation had sought to interview him further following a meeting in July.
A lawyer for McKelvey said the former executive refused to meet because he did not have sufficient time to review the facts of what had happened over the course of several years.
McKelvey became another casualty in the widening scandal over the accounting of past options grants. At least 135 U.S. companies have disclosed internal inquiries or government investigations, and at least 39 executives and board directors at 19 companies have been fired or have resigned.
Monster also received a subpoena from the U.S. attorney's office in the Southern District of New York over stock options.
It said in December that it filed restated financial statements to include charges related to the investigation into its stock-option granting.