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Juniper settles backdating suit

August 29, 2007|From Times Wire Services

Networking equipment maker Juniper Networks Inc. on Tuesday became the fifth company in recent months to settle federal allegations of improper backdating of stock options.

Juniper was not fined in settling the civil fraud lawsuit brought by the Securities and Exchange Commission, which had accused it of concealing hundreds of millions of dollars in options expenses from investors.

The company, based in Sunnyvale, Calif., neither admitted nor denied the SEC's allegations but did agree to refrain from future violations of the securities laws.

The SEC also sued Lisa Berry, who was a general counsel of computer chip supplier KLA-Tencor Corp. and later of Juniper. The agency accused her of repeatedly backdating option grants from 1997 to 2003 and creating phony documents to enable the process.

Berry, through her attorney, disputed the SEC's allegations. "This case is unfounded and the SEC's allegations don't make it otherwise," said the attorney, Melinda Haag.

In July, San Jose-based KLA-Tencor settled the SEC's allegations of improper options backdating. It was not fined but agreed to an injunction against securities-law violations.

The SEC alleged that from mid-1999 through mid-2003, Juniper hid hundreds of millions of dollars in expenses, and overstated its income, by backdating the stock option grants and failing to properly disclose them.

The SEC has been investigating more than 100 public companies, many of them in Silicon Valley, over suspect timing of stock option awards to executives.

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