Foundry (FDRY) says it will have to restate financials after finding backdated option grants.
The San Jose, Calif., networking gearmaker says some dates for stock option grants between 2000 and 2003 differ from the recorded grant dates. The company says it hasn't determined how much in charges need to be restated but it "believes the charges will be material."
Foundry received a federal grand jury subpoena in July opening an investigation into the company's stock option practices. The company is among dozens being probed by regulators in a broad securities fraud crackdown relating to manipulated stock grant dates.
The grant date on options sets the strike price or purchase price of the stock award. Moving the grant date to periods when the stocks were at lows could dramatically increase the value of the shares to the option holders if the price has since risen.
The news comes as Foundry says it hired Dan Fairfax as its principal accounting officer. Fairfax's title as of Sept. 9 is vice president, corporate controller, according to a federal filing.
Foundry shares fell 35 cents, or 3%, to $12.62 in premarket trading Friday.