Former KB Home Exec Guilty of Conspiracyby
The Justice Dept. announced today that Gary Ray the former head of human resources at KB Home has pleaded guilty to obstruction of justice for tyring to cover up an options backdating scandal at the big home builder.
KB’s former chairman and ceo Bruce Karatz agreed to pay $7 million in penalties in September for what the Securities and Exchange Commission said was scheme to award stock options retroactively based on the lowest price the stock had traded at.
According to today’s press release: “Ray has admitted that he and the CEO agreed that they would collaborate in causing KB’s general counsel to prepare and to submit a false and misleading report on KB’s historical option granting practices to KB’s Audit Committee and other KB managers, who relied on the false report in making disclosure decisions with respect to required SEC filings.”
Ray faces a maximum sentence of five years in prison.