Read The Recorder‘s roundup of the stock-option backdating scandal. There won’t be a test later … but there might be a subpoena.
In dropping the case, regulators raised new questions about their criteria in deciding which cases to pursue. Michael Dicke, a supervisor in the San Francisco SEC office, said commission policy is not to comment on concluded probes.
Defense lawyers on the case pointed to an October CNET press release that blamed the improprieties on the executives, but which also said their wrongdoing was unintentional. Arthur Burke, the Davis, Polk & Wardwell partner who did the internal investigation, declined to comment Tuesday.
While the defense lawyers were heartened, Darren Robbins � a partner at the San Diego plaintiff firm Coughlin, Stoia, Geller, Rudman & Robbins suing CNET and its board for the options problems in a shareholder derivative suit � was less than enthusiastic.
“The conduct that occurred at CNET is completely outrageous,” he said Tuesday afternoon. He added that the end of the SEC probe won’t affect his suit.
“If you’re in the situation of the prosecutors or the regulators, their process, their burden, their motivation is different from the private civil actions,” he said. Whereas the government intends to protect the market, he added, “the primary motivation in the private civil actions is to protect the interest of the company.”
