Brocade to Settle Options Case with $7 Million Pay Out: WSJ
Brocade Communications Systems agreed to pay a $7 million penalty to settle allegations it improperly issued stock-option grants, the Wall Street Journal reported on its Web site on Thursday.
The settlement with the U.S. Securities and Exchange Commission could be announced this week, the paper said, citing unnamed sources.
Brocade spokeswoman Leslie Davis declined to confirm the settlement. "We do not have any further updates at this time," she said.
The SEC could not be reached immediately.
Brocade first struck a deal with the SEC to pay $7 million in March 2006, the paper said, adding the settlement was held up as the number of companies under investigation for backdating options increased.
Backdating is a practice in which companies change the grant dates of stock options to boost their value to top executives. The practice is illegal if companies do a poor job of disclosing it or improperly account for it.
More than 180 companies have conducted internal inquiries into their options practices or are under investigation by U.S. authorities over their stock-options practices.