Tencor scandal options backdating

by  |  05-Oct-2019 07:17

Normally options reflect the closing price of the share on the day it is granted, if the stock rises after the day of issue then the individual can exercise the option (buy the stock) and benefit from the premium generated.

Manipulating the option and backdating to a previous date allows the recipient to select a time when the market is clearly down, like after the Sept 11 attacks, as the date for the granting of options, maximizing the chance of a profit.

The lower the exercise price, the greater the potential gain.

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The new merged entity is named Broadcom Limited but inherits the ticker symbol AVGO. In May 2016 Cypress Semiconductor announced that it will acquire Broadcom Corporation's full portfolio of Io T products for $550 million.

Under the deal, Cypress acquires Broadcom's Io T products and intellectual property for Wi-Fi, Bluetooth and Zig Bee connectivity, as well as Broadcom's WICED platform and SDK for developers.

The Securities and Exchange Commission filed civil-fraud charges against Berry, a 49-year-old resident of Los Gatos, Calif., in federal court in San Jose, Calif.

She is the second former KLA-Tencor executive to be charged and the first former Juniper executive.

As first noted in a series of groundbreaking articles in The Wall Street Journal, these patterns of almost too-good-to-be-true timing took place in the late 1990s and early years of this century.

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