Susan Skaer, former general counsel of Hewlett-Packard Co.’s Mercury Interactive unit, lost her bid for dismissal of a U.S. lawsuit alleging she took part in a scheme to improperly backdate stock options.
U.S. District Judge William Alsup in San Francisco denied Skaer’s request to throw out U.S. Securities and Exchange Commission claims, according to a court filing today.
“A jury could reasonably find that attorney Skaer was a knowing participant in a scheme by which defendants caused Mercury to issue backdated stock options in violation of Mercury’s internal stock options plans and without reporting compensation expenses,” Alsup said. He also rejected her arguments that the SEC waited too long to sue her.
The five-year-old lawsuit against Skaer and other former Mercury executives alleges they changed dates on stock options to make them more valuable, a practice among many technology companies that led to a federal investigation, the ousters of 90 executives and directors, billions of dollars in restatements and criminal charges against executives at 10 companies.
SEC attorneys say more than 40 stock option grants at Mercury Interactive were backdated from 1997 to 2002, and $258 million in compensation expenses weren’t reported to investors as a result, according to court documents.
James Kramer, an attorney for Skaer, didn’t immediately respond to an e-mail seeking comment on the ruling.
Two other former Mercury executives, ex-Chief Executive Officer Amnon Landan and ex-Chief Financial Officer Douglas Smith, settled with the SEC, according to court filings that didn’t give details of the accords.
The case is SEC v. Landan, 07-2822, U.S. District Court, Northern District of California (San Francisco).