Corporate Governance

Former President and CFO of SafeNet, Sentenced for Part in Backdating Scheme

By Andrew Hayden

On January 28, 2007 Carole Argo, former President and CFO of SafeNet, was sentenced to 6 months in jail and fined $1 million for her involvement in a backdating scheme. As wereported in November of last year, Ms. Argo plead guilty to one count of securities fraud admitting she “intentionally and systematically set out in a course of action to create opportunities for her and others to benefit financially through the backdating of stock option grants.”

Ms. Argo’s guilty plea and sentence is in connection with two backdating grants which netted her and a former CEO of SafeNet over $2.5 million.  Additionally, Ms. Argo received performance bonuses totaling $650,000, given to her, in large part, based upon corporate earning statements which did not include the backdated information.

Michael J. Garcia, U.S. Attorney for the Southern District of New York issued a release concerning Ms. Argos sentencing. In the release Mr. Garcia stressed that Ms. Argo’s backdating, which occurred between 2000 and 2006, was part of a larger conspiracy to keep her activities secret from “Safenet’s shareholders and outside auditors, as well as securities analysts, the SEC, and members of the investing public.”

The primary material concerning this case can be found at theDU Corporate Governance Website.

Full post as published by The Race to the Bottom on February 10, 2008 (boomark / email).