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Juniper Faces Option Probe

Already besieged by a sales slowdown, the networker now faces a backdating investigation.

The feds added

Juniper

(JNPR) - Get Report

to the list of companies they are probing for suspicious stock option timing.

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The U.S. attorney for the Eastern District of New York has started an investigation into the Sunnyvale, Calif., tech shop's option grants, Juniper said Monday.

The Brooklyn U.S. attorney's probe comes as regulators and New York federal prosecutors are examining the possibility that a number of companies back-dated option grants to enhance the value of shares available to executives.

Juniper emerged as a candidate for investigation

after an analyst report showed that six out of 15 grants to executives were made at the stock's lowest trading price of the month.

The company says it is cooperating with the investigation. "Juniper is a quality company whose success is the byproduct of an unwavering commitment to customers, employees, partners and shareholders," CEO Scott Kriens said in a press release.

The apparent manipulation of grant dates to enrich fat-cat executives was uncovered in March, when

The Wall Street Journal

reported that the

Securities and Exchange Commission

was examining a dozen companies for possible options timing practices.

The U.S. attorney for the Eastern District of New York fired the first shot in the now widening backdating scandal, with a May 2 subpoena of

Comverse Technology

(CMVT)

. CEO Kobi Alexander, CFO David Kreinberg and company attorney William Sorin resigned from Comverse on May 1.

The securities-fraud crackdown continued when rival federal prosecutors at Manhattan's Southern District of New York issued subpoenas last week to

UnitedHealth

(UNH) - Get Report

,

Affiliated Computer

(ACS)

and

Caremark

(CMX)

.

The JPMorgan analyst report that flagged the options-timing pattern at Juniper also pointed to a suspicious series of grants at data switchmaker

F5 Networks

(FFIV) - Get Report

. The company dated six out of 10 grants to executives on exactly the lowest point for the stock during the given month.

F5 representatives haven't replied to messages seeking comment.

Juniper's appearance on the possible backdating list could be expected to add to the drag on the Internet gearmaker's stock, which was already on the slide since last month's

unwelcome forecast of a sales slowdown.

The option-dating scrutiny is also bound to highlight Juniper's

insider selling over the years.

CEO Scott Kriens, who is enrolled in a prearranged stock-selling program, cashed in $49.6 million worth of shares last year, and $80 million since he started unloading the stock in November 2002.

Juniper shares rose 2% in early afternoon action Monday, but are down 31% for the year.