The investigation found that sometimes business unit personnel did not provide complete information to corporate headquarters and, in a number of instances, purposefully incorrect or incomplete information about these activities was provided to internal or external auditors." As the 8-K report described, much of this activity consisted of moving money from one account to help pad another.
As a result, the actual amount of the restatement of earnings may actually not be very large - perhaps less than 1% of the company's earnings for each of the four fiscal years in question.
Two shareholder derivative complaints that were eventually settled accused Carson, most of Costco’s board, and several chief executives at the company of illegally backdating stock options.
But he did not elaborate on whether Rollins was asked to resign by the board.Rollins' departure comes after , during which it lost its lead in PC market share to Hewlett-Packard and an investigation by the SEC for possible accounting improprieties began.In theory, it links the executive’s financial interests with a shareholder’s — executives run the company well, the company does well, everyone’s shares go up in value, everyone makes money.Options backdating entails altering the date of when the CEO’s stock option was granted to an earlier date when it was worth a particularly low amount.In addition to announcing Rollins' departure, the company said that it now expects its fourth-quarter results to be below analyst expectations for both revenue and earnings per share.
The board of directors was involved in Rollins' decision to resign from the company, Pearson said.As surprising as it is for a case to have settled following dismissal and while appeal was pending, this peculiar settlement timing is not entirely unprecedented.Most notably, the parties to the Bristol- Myers Squibb securities class action lawsuit agreed to settle that case for 0 million while the case was on appeal to the Third Circuit following the district court’s dismissal.In its December 3, 2009 filing on Form-10-Q (here), Dell disclosed that on November 20, 2009, it had entered a written agreement to pay million to settle the consolidated securities class action lawsuit pending against the company and certain of its directors and officers.What makes the million Dell settlement noteworthy is not its amount but its timing – the settlement comes not only after the securities lawsuit had been dismissed with prejudice at the district court level, but following oral argument on the plaintiffs’ subsequent appeal to the Fifth Circuit.In this case, the scheme’s beneficiaries reportedly made out with 3 million over a ten-year period.