"Witch Hunt" in the Silicon Valley

Iria · Aug 15, 2006, 09:49 PM

Source: Business Week
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At the start of this year, word began to spread around Silicon Valley that the Securities & Exchange Commission was on the prowl for companies that improperly accounted for stock options grants during the Internet boom. For a while, executives whispered about which companies were most at risk. But now, many executives are surprised by the breadth of the government's probe, which has resulted in SEC investigations into 80 companies and criminal indictments against former executives at Brocade Communications and Comverse Technology. In the latest development, on Aug. 14, Sanmina-SCI and PMC-Sierra revealed potential problems related to their stock option grants.

Already, most tech companies have launched their own investigations of their books, to spot irregularities before the feds or the press does it for them. But many tech executives are now beginning to use the phrase "witch hunt" to describe the growing scandal. While few doubt there were cases of outright fraud that should be punished, they fear that the widening probe has now reached a counterproductive level. Rather than just catching scofflaws, well-meaning companies and executives are being wrongly impugned by the scandal, in their view.

Aug 15, 2006, 09:49 PM	#1
Iria DriverHeaven Extreme Member Join Date: Apr 2004 Posts: 7,275 Rep Power: 89	"Witch Hunt" in the Silicon Valley Source: Business Week _________ At the start of this year, word began to spread around Silicon Valley that the Securities & Exchange Commission was on the prowl for companies that improperly accounted for stock options grants during the Internet boom. For a while, executives whispered about which companies were most at risk. But now, many executives are surprised by the breadth of the government's probe, which has resulted in SEC investigations into 80 companies and criminal indictments against former executives at Brocade Communications and Comverse Technology. In the latest development, on Aug. 14, Sanmina-SCI and PMC-Sierra revealed potential problems related to their stock option grants. Already, most tech companies have launched their own investigations of their books, to spot irregularities before the feds or the press does it for them. But many tech executives are now beginning to use the phrase "witch hunt" to describe the growing scandal. While few doubt there were cases of outright fraud that should be punished, they fear that the widening probe has now reached a counterproductive level. Rather than just catching scofflaws, well-meaning companies and executives are being wrongly impugned by the scandal, in their view.