Marvell Settles Backdating Charges

SAN FRANCISCO -- Marvell TechnologyMRVL will pay $10 million to settle charges that the chipmaker improperly backdated employee stock options.

A related settlement with the Securities and Exchange Commission also bars company co-founder Weili Dai from serving as an officer or director of any public company for five years.

The deal is the latest fallout from the controversy over the widespread practice of backdating stock options, which came to light a couple of years ago.

In April, BroadcomBRCM settled similar charges with the SEC for $12 million. And former UnitedHealth GroupUNH CEO William McGuire entered into a record $468 million settlement with the SEC last year that included a large reimbursement from gains earned during the backdating period.

According to the SEC, Marvell inflated its income by $362 million between 2000 and 2006 by routinely backdating stock options to dates when the stock price was lower. Dai, who served as chief operating officer at the time, falsely signed documents to make it appear as if stock compensation committee meetings occurred at those earlier dates, the SEC said.

Marvell did not admit or deny the SEC's allegations in settling the matter.

The deal closes one chapter in a protracted affair that has shook up the Santa Clara, Calif., chipmaker and whose effects continue to reverberate within the company. Several high-ranking Marvell executives exited the company as a result of the backdating controversy, and, one year later, the company has yet to find a permanent finance chief.

Dai, who co-founded Marvell with her husband Sehat Sutardja, was demoted to a nonmanagerial role following the backdating inquiries. She will pay a $500,000 fine to the SEC as part of Thursday's settlement.

Shares of Marvell were up 21 cents at $13.39 in recent trading Thursday.