Marvell Gets Options Inquiries
Marvell Technology (MRVL) received inquiries from the Securities and Exchange Commission and a federal grand jury related to its options practices.
The Sunnyvale, Calif., chipmaker is the latest in an lengthening line of companies, most of them tech outfits, to come under federal scrutiny in an investigation of options "backdating." The term refers to the timing of options grants by companies to maximize their value to employees.
To date, dozens of companies have received notices and subpoenas in the probe. Marvell described the SEC inquiry as "informal" in a filing Wednesday.
"At the direction of the company's board of directors, a special committee of the board has commenced an internal review, assisted by outside legal counsel, relating to past stock option grants, the timing of such grants and related accounting matters," Marvell said in the 8-K filing.In addition to the government inquiries, Marvell said it was sued in federal court by a shareholder seeking damages related to the company's options practices. Marvell closed at $44.84 Monday. On Wednesday morning, the shares lost $1.73, or 3.9%, to $43.11.
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