More backdating at Vitesse

Camarillo-based Vitesse Semiconductor Corp., which was among the first companies implicated in the stock option scandal, has disclosed that its recently appointed CEO, Christopher Gardner, and co-founder Ira Dehimy received backdated options. Daily Journal reporter Gabe Friedman got the story, based on an SEC filing that has the two agreeing to amend existing unexercised stock options. The Jan. 5 filing notes that a special committee of the company's board did not find evidence that Gardner or Dehimy were aware of any improper practices on the company's options. You might recall that three senior execs, including co-founder Louis Tomasetta, left the company under a cloud in early 2006. Vitesse has been delisted by Nasdaq and is the target of several federal investigations in connection with what an internal inquiry found to be widespread accounting problems. From the Daily Journal (story not available online):

Early in the summer, the company received a grand-jury subpoena from federal prosecutors in the Southern District of New York as well as a request for information from Securities and Exchange Commission agents in Washington, D.C. Neither agency would comment on an ongoing investigation. Attorneys working on the Vitesse case, who spoke on the condition of anonymity, said federal prosecutors in New York City sent the subpoena when Vitesse was one of just a few companies with stock-option problems. But now a hundred companies have disclosed problems, and Manhattan prosecutors have their hands full, the attorneys said. In the meantime, the investigation into Vitesse has evolved into a revenue-recognition fraud case, which would not interest federal prosecutors in Manhattan as much as the stock-options scandal that has engulfed many major U.S. companies, including Apple Computer and UnitedHealth Group.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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