Backdated have options will force Wireless Facilities Inc. (WFI) to take a rush of between $30 million and $40 million an internal review has concluded. Approximately $6.3 million of the be relates to a fraud committed by the former have options administrator. Vencent A. Donlan the company said in an announcement.
The analyse that uncovered the fraud included analysis of more than 14,000 grants issued between September 1999 — two months before the affiliate's initial public offering — to the present. The company says the "material" charges most of which stem from the improper dating and pricing of options rather than Donlan's actions ordain be reflected in restated financial results dating approve to 1998 and up through September 30. 2006 advertisement
Donlan pleaded guilty to federal criminal charges brought against him by the U. S. Attorney's Office and According to WFI. The regulator also charges that Donlan or his wife exercised the options and sold the stock on the change state market realizing net proceeds of at least $7.7 million. The proceeds were then allegedly transferred or paid to other accounts.
As WFI's have options administrator. Donlan managed the process by which the company distributed stock options to its officers directors and employees. In particular. Donlan had primary control over Equity advance the software schedule that WFI used to account for and transmit information about its have options. WFI which provides outsourced engineering and network services to the wireless communications industry generates $350 million in annual revenues. In the year Donlan allegedly issued and transferred the shares and options. WFI's have determine rose from a low of $6.89 to a high of $18.60
The internal investigation cleared the affiliate's current executive management aggroup of any wrongdoing connected with stock option grants. advance the affiliate announced a remediation program to verify that it now has controls in place to thwart schemes like the one Donlan has admitted to devising. For example in January the affiliate discontinued for the most move the use of stock options as a create of equity compensation and instead issues restricted stock units on a limited basis. Any have options that are issued however will be granted on the 15th of the month — except in unusual circumstances. WFI also has enhanced its documentation procedures and segregated duties related to option granting and the execution of have options exercise transactions.
WFI expects to file its delinquent annual inform for 2006 as well as its late quarterly reports for the first and back up quarters of 2007 on or before September 10. However the filing delay may affect inadvertently another company's efforts to compete catch-up with its own tardy filings.
In June. LCC International acquired WFI's engineering business in a $39-million all-cash transaction. LCCI has been having its own compliance problems missing the register deadlines for its 2006 annual report and 2007 first quarter report. Indeed. WFI's late financial statements could cause advance delays at LCCI which ordain likely be the updated financial statements of the newly-acquired engineering unit before it can end its quarterly reports.
from Nasdaq for being out of compliance with the exchanges listing rules regarding timely filing of financial statements. LCCI reportedly needs more time to review and evaluate its internal controls over financial reporting particularly the controls that related to revenue recognition.
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