Her alleged scheme resulted in more than 0 million in expenses not being disclosed by Juniper, according to the SEC.
Fagel notes that in most cases of financial fraud, such as improper practices related to revenue recognition, the SEC doesn’t find that internal attorneys are behind the wrongdoing.
But backdating is a different story, as company attorneys are often involved in decisions about employees’ compensation.
The concept could have been shared by employees switching jobs during the time period when most backdating occurred — the late 1990s and first few years of this decade.
During new job negotiations, a person may have said, “‘I had an interesting options package that was oddly dated and now that I’m moving to another company, and I want my options at last week’s price,'” theorizes Fagel.
In Berry’s case, she served on Juniper’s three-member stock option committee along with the company’s CEO and CFO and reviewed the company’s annual reports.
Law360, New York (October 11, 2011, PM EDT) -- A former general counsel to a pair of Silicon Valley tech companies, including Juniper Networks Inc., agreed Friday to pay more than 5,000 to settle allegations she illegally backdated company stock options. Berry, who also served as general counsel and vice president of KLA-Tencor Corp., allegedly hid hundreds of millions of dollars in stock option expenses, according to a lawsuit filed in California by the U.
Since the backdating scandal began unfolding nearly two years ago, regulators and outsiders have been wondering why so many public companies — many of them in the technology industry — began issuing undisclosed, misdated stock options grants around the same time.
Was it spread through word of mouth between directors who served on different boards?
By not disclosing these changes, her practice went against Juniper’s stated policy of granting stock options at fair market value, the SEC notes.
She also allegedly created minutes of compensation committee meetings that had not occurred in order to justify misdated option grants.
and Juniper Networks, with backdating option grants from 1997 to 2003. “When we started looking at the players [of these two cases] and saw they had the same general counsel, we said ‘Wow,'” Marc Fagel, associate regional director in the SEC’s San Francisco office, told