Landan, Ex-Mercury CEO, to Pay $4.5 Million in SEC AccordKaren Gullo
Amnon Landan, former chief executive officer of Hewlett-Packard Co.’s Mercury Interactive unit, will pay $4.5 million to settle claims by U.S. securities regulators that he took part in a scheme to improperly backdate stock options.
Landan will pay $2.3 million to the U.S. Securities and Exchange Commission, representing disgorgement of $1.2 million in profit plus interest and a $1 million fine, according to a filing today in federal court in San Francisco by attorneys for the agency and Landan.
He will also pay $2.2 million in reimbursement to Mercury Interactive and is prohibited from serving as an officer or director of a publicly traded company for five years, according to the filing. Landan didn’t admit or deny the SEC’s allegations, according to the filing.
Andrew Solomon, Landan’s attorney, had no immediate comment on the filing in an email.
Former Mercury Interactive Chief Financial Officer Douglas Smith agreed to pay $350,000 to settle SEC claims in the backdating lawsuit, according to a separate filing today.
The five-year-old lawsuit against Landan and other former Mercury executives alleges a scheme to change dates on employee stock options to make them more valuable without reporting the resulting compensation expenses. Stock option backdating 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.
The case is SEC v. Landan, 07-2822, U.S. District Court, Northern District of California (San Francisco).