Among the mansions and box stores popuutf8g Silicon Valley are several major tech firms at the heart of a stock option backdating scandal that has metastasized through corporate America over the last two years.
The hall of shame includes Juniper Networks, McAfee, Nvidia, Brocade Communications Systems, and most notably for this story, a Mountain Viewbased firm called Mercury Interactive, which came under scrutiny in late 2004, making it one of the earliest companies identified for allegedly tampering with the lucrative stock options given to employees.
While some of the half-billion-dollar backdating mess at Mercury has appeared in the business press already, additional details contained in a civil lawsuit filed by investors are under seal in Santa Clara County Superior Court, and three news outlets want them opened up by a judge.
"These companies fleeced investors, and the public has a right to know," Karl Olson, an attorney for the outlets, told Judge James Kleinberg during a hearing Jan 5. Olson is representing the San Francisco Chronicle, Bloomberg News, and the Recorder legal newspaper. He added the defendants have "not shown an overriding interest that supports sealing any of these records."
Attorneys for the company and its fallen former executives have not cited trade secrets or proprietary information commonly used excuses in corporate litigation as reasons for keeping the filings sealed. Instead, they seem to be worried the documents will paint an even more sordid picture of executive misdeeds than what's already come out, and they want to block the press from telling the full story.
But there is an interesting irony to the Chronicle insisting it is entitled to access this information. The newspaper's parent company, the Hearst Corp., asked a federal judge to withhold from the public some of its own company records unearthed amid a federal civil suit leveled against it and other media giants over the summer.
San Francisco real estate mogul Clint Reilly filed an antitrust claim against Hearst and its rivalcumbusiness partner, Denver-based MediaNews Group, owner of several Bay Area newspapers, arguing that a bid between the companies to share business expenses was illegal. The Guardian has joined an effort with the nonprofit Media Alliance to unseal records related to Reilly's suit.
But in the Mercury case, attorneys for the company and its former executives complain individuals not listed as defendants "would have their identities revealed and be implicated in alleged misconduct."
Mercury certainly would like to forget its troublesome past. Computer giant Hewlett-Packard is closing out its purchase of the company for $4.5 billion, taking on Mercury's liabilities and obviously hoping to put the backdating matter to bed.
Nationwide, somewhere between 150 and 200 companies (reports vary) are internally investigating options problems or have received inquiries from the Securities and Exchange Commission (SEC), the federal agency charged with ensuring publicly traded firms reveal essentially every major move they make.
Mercury was founded in 1989 and produces business software for companies worldwide.
Most Commented On
- oEWlFRRxKQEBaX - March 11, 2014
- The GOP Rating is Almost Negative - March 10, 2014
- Charlotte Shultz's slush fund - March 10, 2014
- Good Reporting Guardian - March 10, 2014
- Did it ever occur to you that - March 10, 2014
- Did it occur to you that she - March 10, 2014
- Is there a more bourgeois cause than white people's - March 10, 2014
- Was this article written by a - March 10, 2014
- The British did not vote for - March 10, 2014
- Separation of non-orthogonal concerns in software architecture - March 10, 2014