SEC Ends Intuit Stock Option Investigation

by Leroy Baker, Tax-News.com, New York

01 November 2006

Intuit Inc., the maker of accounting software for US small- and mid-sized firms, has been notified by the Securities and Exchange Commission that an investigation into its stock option granting practices has been formally terminated.

The SEC sent an informal request to Intuit regarding its stock options accounting practices in June 2006. In response, the company established a review body comprised of independent directors.

In August 2006, Intuit announced that this review had uncovered no evidence of fraud or intentional wrongdoing on the part of the company in relation to stock options.

Based on this review, Intuit concluded that it did not need to restate its historical financial statements.

Intuit presented the results of this independent review to the SEC and to the United States Attorney for the Northern District of California. The US Attorney has also received the same information submitted to the SEC and has not made any additional requests for information.

The SEC's request forms part of a wider crackdown by Congress on the practice of backdating employee stock options, whereby executives wait until after the fact to pick a date for their stock options, then pick the low point of the stock during the year to maximize their profit.

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