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McAfee ex-lawyer charged in option case

February 28, 2007|From Times Staff and Wire Reports

A federal grand jury in San Francisco on Tuesday indicted Kent Roberts, former general counsel at McAfee Inc., accusing him of fraud in connection with alleged backdating of stock options.

Roberts is the third executive to be indicted in Silicon Valley's backdating scandal. Two former executives at San Jose-based Brocade Communications Systems Inc. were indicted last summer.

A seven-count indictment accuses Roberts of granting himself and others backdated options and hiding the alleged scheme from board members, shareholders, auditors and the Securities and Exchange Commission.

"We intend to vigorously defend the charges against Mr. Roberts, but have no further comment at this time," said his lawyer, Stephen Neal, a partner at law firm Cooley Godward Kronish.

The backdating allegedly occurred in 2000 and 2002 at the Santa Clara, Calif.-based maker of security software, which changed its name from McAfee in 2004.

The indictment also accuses Roberts of concealing changes made in 2002 to his 2000 stock option grant.

Roberts is charged with two counts of mail fraud, one count of wire fraud, three counts of making false SEC filings and one count of falsifying company records.

Each mail and wire fraud count carries a maximum penalty of 20 years in prison and a fine of $250,000.

U.S. Atty. Scott N. Schools said, "It is integral to the public trust in our financial markets that transactions affecting a company's financials are recorded honestly, particularly by those who are responsible for regulatory compliance."

In October, McAfee announced the retirement of its chairman and chief executive and the firing of its president over the handling of option grants.

Roberts will appear in court Thursday for his arraignment.

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