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Bed Bath & Beyond Finds Options Errors

The SEC launches an informal inquiry.
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Bed Bath & Beyond

(BBBY) - Get Bed Bath & Beyond Inc. Report

said Tuesday that a special committee found several incidents of backdated stock options grants and it plans to record charges on the errors.

The home-goods retailer also said the

Securities and Exchange

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has launched an informal inquiry into the matter.

Backdating is the practice of giving employees options to buy company stock at a short-term low price point that was known after the fact. In an SEC filing, Bed Bath & Beyond said it found that "some hindsight" was used in choosing certain stock option grant dates.

From 1993 to 1997, grant date prices were "generally favorable," though not consistently the lowest grant price dates. From 1998 through 2006, five annual grant dates were at the low price of the quarter.

The company plans to record a $66 million reclassification on the balance sheet of its annual report for the year ending in March. The company also expects to record an $8 million charge in the third quarter to reflect revised measurement dates.

Bed Bath & Beyond said it found no willful misconduct in the grant process or an intent to mislead. The company plans to fully cooperate with the SEC's inquiry.