It was a proud day for Kent Roberts when McAfee Inc. then called Network Associates Inc. promoted him to vice president of legal affairs on Valentine’s Day 2000. The promotion carried with it a sweet reward, the option to buy 20,000 shares of company stock that would vest over the next four years. His “strike price” was $29.63, the stock’s closing price on Feb. 14. But it was not Roberts’ lucky day. Instead of rising, McAfee’s stock began a long decline, potentially wiping out any windfall. Employees who cash in stock options profit from the difference between the strike price on the day the options are granted and the higher market price when the stock is sold. The share price of McAfee, which makes computer antivirus and security software, has fluctuated, as most tech companies’ do. But as Roberts watched McAfee’s stock price decline over the next couple of months, his options were “under water,” basically worthless unless the share price revived.

But within months of his February grant, Roberts allegedly took matters into his own hands. He “caused” the company’s then-controller, Terry Davis, to access a secure computer system, called Transcentive, and changed the grant date, according to court documents. Davis and Roberts switched it to April 14, 2000, a day when the stock price was $19.75, or nearly $10 lower than Roberts’ grant price, court documents say. That way, even if the stock only climbed back to $29.63, the GC would still profit by some $197,500.

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