Monster exec pleads guilty
Myron Olesnyckyj, former general counsel of Monster Worldwide Inc., pleaded guilty to federal charges stemming from a probe of illegal stock option grants.
Olesnyckyj, who was fired in November by New York-based Monster, owner of the most-used online job list, pleaded guilty to conspiracy and securities fraud Thursday in federal court in New York.
“The proceeds from this activity were $381,000,” Olesnyckyj, 45, told U.S. District Judge Laura Taylor Swain. “I plead guilty, your honor.”
He becomes the seventh person to be charged over option grants. At least 200 companies have disclosed internal or federal probes into whether they inflated the value of options awarded to executives by backdating or timing the grants to coincide with days when the stock price was low. Monster said in December that it had overstated earnings by $271.9 million in the past nine years because of improperly recorded option grants.
The U.S. Securities and Exchange Commission earlier Thursday filed a civil lawsuit against Olesnyckyj accusing him of creating documents that falsely showed Monster’s compensation committee had granted options to employees on dates when its stock price was low. He and others also directed the issuance of options without obtaining the committee’s approval, as required, the SEC wrote in its complaint.
“The company terminated him some time ago, so it’s inappropriate for us to comment,” said Monster spokeswoman Kathryn Burns. She said Monster will continue to cooperate with investigators.
Ex-executives of San Jose-based Brocade Communications Systems Inc. and New York-based Comverse Technology Inc. were charged by U.S. authorities last year.
Charges against Olesnyckyj were filed by U.S. Attorney Michael Garcia in New York. The criminal investigation was conducted by the U.S. Postal Inspection Service.
Monster co-founder Andrew McKelvey quit the board in October after refusing to cooperate with the company’s inquiry of the matter. Monster’s internal investigation found that some of its transactions with McKelvey and his relatives from 1996 to 2006 weren’t properly disclosed, the company said in a June statement.
The company made more than $500,000 in inappropriate payments to McKelvey, Monster said in a statement Dec. 13. The adjustments cut 2005 net income by $9.24 million, 2004 net income by $14.4 million, 2003 net income by $27 million and also reduced earnings in earlier years.
McKelvey’s lawyer, Steven Reich, didn’t return a call Thursdayseeking comment.
The case is U.S. v. Olesnyckyj, Southern District of New York (Manhattan).
– Bloomberg News