Former Monster General Counsel Taken To Task Over Stock Option Backdating

by Glen Shapiro, LawAndTax-News.com, New York

21 February 2007

The Securities and Exchange Commission announced last week that it has charged Myron F. Olesnyckyj, the former General Counsel of Monster Worldwide, Inc. with securities fraud for participating in a multi-year scheme to secretly backdate stock options granted to thousands of Monster officers, directors and employees, including himself.

Olesnyckyj, along with others, falsified documents to make it appear as if the company had actually granted options on certain dates. In reality, the grant dates had been selected after the fact by looking backward for a date on which the stock price was low.

By backdating and improperly accounting for options, Monster granted undisclosed compensation to its employees, failed to recognize compensation expenses, and overstated its net income by $340 million from 1997 through 2005, says the SEC.

Linda Thomsen, Director of the Commission's Division of Enforcement explained that:

"By backdating the vast majority of the stock options it granted, Monster, one of the premier Internet companies of the last decade, used the lure of instant 'paper profits' to attract and retain its employees without booking the appropriate employee compensation charges. This scheme defrauded Monster's investors. The SEC will continue to work tirelessly to uncover and to stop such conduct."

Mark Schonfeld, Director of the Commission's Northeast Regional Office, added:

"Olesnyckyj knew that backdating was wrong but nonetheless went along with the scheme. Any lawyer who works at a public company should do everything possible to thwart fraud - not participate in it."

The Commission's investigation into the matter is ongoing.

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