Kb homes and backdating
Last year, a federal judge in Orange County threw out similar cases against Broadcom Corp. Nicholas III and Chief Financial Officer William Ruehle, citing prosecutorial misconduct. Prosecutors claimed Karatz illegally backdated his stock options between 19 while he was chairman and chief executive of KB Home.A stock option allows an employee to purchase a company's stock at a preset price at a future date.Defense attorney John Keker said Karatz did not intend to defraud shareholders and had discussed the company's handling of options with accountants and company lawyers Karatz was considered one of the most prominent executives in the United States to stand trial in the government's five-year crackdown on options backdating.Revenues at KB Home soared under his watch, reaching a record billion in 2006.Last year, a federal judge in Orange County threw out similar cases against Broadcom Corp. Nicholas III and Chief Financial Officer William Ruehle because of mistakes by prosecutors. Prosecutors claimed Karatz made some million by illegally backdating stock options between 19 while he was chairman and chief executive of Los Angeles-based KB Home, one of the nation's largest homebuilders.The counts Karatz was convicted of stem from mid-2006, when prosecutors say he concealed and lied about his role in the backdating.
A federal jury has found Karatz guilty of four felony counts in connection with a stock backdating scam.(AP Photo/Nick Ut) (/ AP) The former head of construction giant KB Home was convicted Wednesday of four felony counts in a stock option backdating scam.Ruehle, accusing prosecutors of a "shameful" campaign to intimidate witnesses and obtain unjustified convictions.Last year, James Treacy, the former president of job search company Monster Worldwide Inc., was convicted of options-related charges and sentenced to two years in prison.Karatz's lawyers argued that he didn't knowingly break any laws and questioned Ray's credibility, noting that he pleaded guilty last year to conspiracy to obstruct justice and agreed to testify in return for leniency.Karatz, Ray and another KB Home executive were forced out in 2006 after the Los Angeles-based homebuilder discovered stock options had been favorably dated between 19.