An ode to the stock option scandal…

March 18, 2008

images-13.jpegRemember the good old days before we taxpayers found ourselves bailing out the likes of Bear Stearns, back when the most exciting story on the business page was stock option backdating? Sure, the backdating scandal was disturbing, revealing widespread sneakiness in the service of greed, and it caused a bunch of earnings restatements. But no one feared it would cause the foundations of our economy to crumble. (Not that I’m worried or anything, but I’m thinking I may plant some vegetables in my urban backyard and maybe get a couple of chickens, too, in case eggs become unaffordable.)

Anyway, the backdating story lingers in certain quarters. American Tower Corporation (AMT), the cell tower company whose over-the-top backdating practices caused it to hit the investigatory jackpot (the SEC, the Justice Department, the IRS and the Department of Labor are all on its case), revealed a new development in its 10-K, filed Friday. The company says it’s “become aware” that the SEC has bestowed a Wells notice on one of its former officers, signaling a likely enforcement action against this unidentified Mr. or Ms. X.

An interesting development, in light of the fact that the special committee of American Tower’s board that originally looked into the backdating matter used its legal power over “derivative” lawsuits to ward off a shareholder suit naming former officers and directors. As noted in the last 10-Q, the committee decided such a suit wasn’t worthwhile, but it looks like the SEC sees things a little differently.

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