Mercury Corp: Incriminating emails uncovered in options scandal
Wall Street Journal blows lid on correspondence between officials in Israeli software company acquired by HP, in which they discuss backdating stock-options
Court documents reveal that former executives at Mercury Interactive Corp. for years had been backdating stock options, the Dow Jones news agency reported on Monday.
The Wall Street Journal newspaper revealed this weekend that Mercury executives had openly discussed the matter, in which documents and option grants were doctored, via email. The paper quoted a document filed to a California court by shareholders who are currently suing former Mercury managers.
According to the court evidence one email quotes a Mercury finance executive writing about using "magic backdating ink" to change the date of an options grant. A second worker was told that the date of his grant had been changed. "You will be happier with the new price," the email said.
Those in on the scheme allegedly used white-out on fax headers to cover for the options being green-lighted after their alleged issue date.
The Israeli software company was purchased in July 2006 by computer giant HP for $4.5 billion. The options scandal was already known at the time of the purchase, indeed its former CEO Amnon Landan was forced to resign following an investigation by the US Securities and Exchange Commission officials.
Some 200 companies are currently being investigated or are conducting internal investigations over
options backdating. The US Justice Department has so far filed criminal indictments against two CEOs – Gregory Reyes of Brocade Communications Inc. and Kobi Alexander of Comverse Technology, who is currently awaiting an extradition hearing in Israel.
Meanwhile, over the course of the past several days executives from Monster Worldwide and Take-Two Interactive Software have confessed to options backdating charges as part of plea bargains.
