Former Monster Exec Gets Two Years In Stock Fraud Case
Former Monster president and COO James Treacy was sentenced Wednesday to two years in federal prison on his conviction in May of stock options fraud.
In addition, Treacy was ordered to pay $6.3 million in fines and another $6.3 million in restitution.
Treacy is the only former Monster executive to receive prison time in connection with a stock options backdating scheme that netted the recipients – including Treacy – millions. Andrew McKelvey, who founded TMP Worldwide, which owned Monster, and was the company’s CEO and chairman, was accused of stock fraud, but because of his terminal pancreatic cancer, was allowed to defer his prosecution after he admitted his guilt in court. McKelvey died in November 2008.
The backdating plan worked by granting employees options at the lowest price during a particular period, guaranteeing that they would be “in the money.”
Prosecutors claimed during Treacy’s federal trial that he made as much as $24 million from the 450,000 backdated options they said he was given. They asked for a 12 1/2 year sentence.
Treacy’s attorneys, presenting some 200 letters from friends and colleagues, asked for leniency, saying no executive in any other backdating case in the U.S. has been sentenced to more than 21 months.
The backdating scandal forced Monster in 2006 to restate its earnings for prior years by $271.9 million. That changed the company’s financial picture for several years, most significantly for 2001 when the initial $69 million profit was restated to be $3.4 million.
Treacy was given until Oct. 20th to report to prison.
The original is here: ERE Articles