Securities Law

Ex-GC Accused of Serial Backdating


Updated: The Securities and Exchange Commission has accused a former general counsel of backdating stock options while employed at two Silicon Valley companies.

Lisa Berry of Los Gatos, Calif., is accused of civil fraud for her legal work at KLA-Tencor Corp. and Juniper Networks Inc. from 1997 to 2003, the Wall Street Journal reports (sub. req.). She is the first executive to face charges for backdating options at more than one employer, ABAJournal.com noted in an earlier post.

An SEC press release claims Berry’s misconduct caused the two companies to conceal hundreds of millions of dollars in stock-option compensation expenses. Berry personally received backdated stock options while at both companies, the complaint (PDF) alleges.

Berry’s attorney, Melinda Haag of Orrick, Herrington & Sutcliffe, said in a statement that Berry didn’t profit from backdated options, the Recorder reports.

“Lisa has no responsibility for actions at either company, had no idea that either company violated options accounting, and did not personally benefit from misdated option grants,” Haag said.

The SEC also announced that Juniper has settled with the SEC without admitting or denying backdating allegations. The company agreed to an injunction barring further violations of the securities law.

In July, KLA-Tencor also agreed to a permanent injunction against violations of record-keeping laws, without admitting backdating charges. Ex-CEO Kenneth Schroeder faces SEC civil charges that he continued backdating practices even after Berry left the company. He has denied the charges.

Originally posted at on 8-28-2007 at 2:11 PM.

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