The former general counsel of computer security firm McAfee was acquitted on Friday of fraud charges relating to alleged stock options backdating.
Kent Roberts, indicted in February 2007, was found not guilty on two of three felony counts of fraud in San Francisco federal court. The jury, following a two-week trial, was hung on a third count of falsifying accounting records. A mistrial was declared and Roberts could be retried on that count.
Roberts was the first general counsel at a U.S. corporation to be criminally tried for alleged stock options backdating violations, his lawyer's office said.
"Mr. Roberts had long sought his day in court to prove his innocence," Steve Neal, lead trial counsel and chairman of the law firm of Cooley Godward Kronish, said in a statement. "On his behalf, we are very pleased with the jury's decision and thank them for their service."
Roberts was accused of "granting himself and others valuable in-the-money stock options while hiding the true nature and value of the stock option grants from Network Associates (now known as McAfee), its board, its shareholders, its auditors, the public and the SEC," the U.S. Attorney's Office in San Francisco said when it brought the charges.
Backdating, the practice of retroactively timing stock options grants to a date at which the stock price was particularly low, itself is not necessarily illegal. However, companies must properly disclose and account for the favorably priced options.
Roberts was originally charged on seven counts related to alleged backdating in 2000 and 2002, but four of the counts were later dropped. He was fired in May 2006 and a management shakeup was announced in October of that year.
Allegations of improper stock accounting practices have led to investigations at numerous companies, including CNET Networks, publisher of News.com.
The former chief executive and another former executive at Brocade Communications have been convicted on backdating-related charges, and executives at Broadcom, Comverse, Monster, and Take-Two Interactive, have pleaded guilty. Other trials are pending.