At least two additional companies have become embroiled in the options granting scandal.
Marvell Technology Group Ltd. Wednesday said it has received a letter of informal inquiry from the SEC requesting certain documents relating to the company’s stock option grants and practices.
The company has also received a grand jury subpoena from the office of the United States Attorney for the Northern District of California requesting substantially similar documents, according to a regulatory filing.
The company said that at the direction of its Board of Directors, a special committee has launched an internal review, assisted by outside legal counsel, relating to past stock option grants, the timing of such grants and related accounting matters.
It also announced that a shareholder derivative action was filed in California. The lawsuit names the company as a nominal defendant and a number of the company’s current and former directors and officers as defendants, according to the regulatory filing.
“The lawsuit seeks to recover damages purportedly sustained by the company in connection with its option granting processes, and seeks certain corporate governance and internal control changes,” according to the SEC filing.
Also on Wednesday, Quest Software Inc. said it will restate annual and quarterly results for the periods 2000 through 2005 and for the quarter ended March 31, 2006 after an internal review discovered that the administrative approvals required to establish the accounting measurement dates for many of the company’s stock option grants awarded during the period from the fall of 1999 and into 2002 were actually obtained after the measurement dates used for financial reporting purposes.
As a result, a special committee has determined that non-cash stock-based compensation expense should have been recorded with respect to those stock option grants and recognized over the vesting period of the options.
The company warned that the amount of the additional expense is expected to be material.
“Because the special committee’s review is still ongoing, it has not determined the aggregate amount of additional non-cash stock-based compensation expense, nor has it determined the amount of such expense to be recorded in any specific prior period or in any future period,” the company stated in a press release.