Google ( GOOG) violated securities laws by issuing $80 million in stock options without registering them or disclosing the move, the Securities and Exchange Commission said Thursday.The search engine company and its general counsel, David Drummond, settled the charges by agreeing to not violate registration and financial disclosure requirements. Google neither admitted nor denied the agency's charges, and neither Google nor Drummond paid any fines in the case. Additionally, the company said that the SEC has closed its investigation of Google related to an interview that its co-founders gave to Playboy. That article caused a brief furor when it was published days before the company's initial public offering last August. "We are pleased there will be no further proceedings regarding the Playboy article, and we are satisfied with the settlement on the stock option issues," Google said in a statement. "We are glad to have these issues behind us." Google's shares rose $1.21 Thursday to $196.59.
"We are concerned with an attitude out there that Google had and other companies may have," says Fagel. He described that attitude as one of "we don't have to worry about these laws, because worst-case scenario, we can have a rescission offer." "That's not our view of the law," Fagel continues. "The rules are there to protect investors, and companies are not free to just disregard the rules." This isn't the first time that Drummond's conduct has gotten less-than-favorable reviews. In July, Google disclosed that the
SEC's staff had recommended the commission bring a civil injunction action against Drummond alleging violation of federal securities laws, including antifraud provisions, stemming from Drummond's prior employment at a corporate training firm. "David Drummond has the full support of the company and its leadership," a Google spokesman said Thursday.