Updated from 12:20 a.m. EDT
The Securities and Exchange Commission is contemplating pursuing civil charges against three directors at Mercury Interactive (MERQ) as part of its option backdating investigation.
The SEC sent so-called Wells notices -- which indicate the commission is considering taking enforcement action -- to Mercury directors Igal Kohavi, Yair Shamir and Giora Yaron, the company disclosed in a news release and a regulatory filing Tuesday.
Mercury's stock was barely affected by the news and in recent trading, shares were off 5 cents to $35.55.Sharlene Abrams, Mercury's former CFO, also received a Wells notice. She's now the CFO of Opsware (OPSW). Opsware, which develops IT automation software, isn't a target of the investigation, the company said. Even so, investors reacted sharply, knocking 50 cents, or 6.1% off the value of the stock, to $7.68 a share. "The proposed action against Ms. Abrams relates to practices at Mercury involving the timing of stock option grants and the apparent timing of quarter-end shipments and certain expense items and accruals," Opsware said in a press release. "Although the remedies the SEC might seek are uncertain, they could include an injunction against Ms. Abrams, prohibiting violations of the securities laws, and a bar against Ms. Abrams serving as an officer or director of a public company." Douglas Smith was CFO of Mercury at the time the scandal erupted. He resigned immediately, along with two other executives. In its