Former Monster Worldwide Inc. chairman and chief executive Andrew McKelvey,
suffering from a life-threatening medical condition, settled charges Wednesday,
January 23, concerning his involvement in a multi-year scheme to backdate
employee stock options.
Under a settlement with the Securities Exchange Commission, McKelvey, 73,
will pay about $276,000 in penalties and be barred from serving as an officer or
director of a public company, the SEC said.
The founder of Monster agreed to the settlement without admitting or denying
any wrongdoing. Charges alleged that from between 1997 and his departure in
2006, McKelvey and other company officials backdated stock option grants to
coincide with the dates of low closing prices of Monster’s common stock.
Their alleged actions caused Monster to misrepresent itself in SEC filings
and overstate its aggregate pretax operating income by approximately $339.5
million for fiscal years 1997 to 2005. McKelvey resigned as chairman and CEO of
Monster in October 2006.
Separately, McKelvey entered into a deferred prosecution agreement with
federal prosecutors and a memorandum of understanding with Monster in their
probes of his stock options backdating.
“In light of McKelvey’s terminal medical condition, the government agreed to,
and the court approved, a deferral of prosecution,” the U.S. Attorney’s Office
for the Southern District of New York said in a press release. Charges against
McKelvey will be dismissed after 12 months if he abides by the terms of the
agreement, which include a statement accepting his responsibility for his role
in the backdating scheme.
McKelvey has also resolved charges brought against him by Monster. He will
pay the company $8 million and convert his stock holdings in the company so his
voting power will be reduced from about 31 percent to 7 percent. The agreement
is subject to court approval.
“This settlement will result in a significant increase in the voice of the
company’s other investors, allow our employees to focus on the needs of our
customers and is a confirmation of Monster’s commitment to the achievement of
world-class corporate governance,” Monster chairman and CEO Sal Iannuzzi said in
a statement.
McKelvey launched Monster in 1999 by merging two career Web sites,
Monsterboard and Online Career Center, which his recruitment advertising firm,
TMP, acquired in 1995.
Filed by Amanda Fung of Crain’s New York Business, a sister publication of
Workforce Management. To comment, e-mail editors@workforce.com.
= Member Only
