Investigation and pending securities fraud class action lawsuit against Quest Software, Inc., alleging improper options backdating.
The class action complaint alleges that every date on which Quest executives and/or directors were granted stock options from 2000 - August 2002 was the most or second most favorable date (i.e., the lowest stock price) in the month and, in most cases, one of the most favorable of the entire year.
The class action lawsuit further alleges that Quest admitted in a January 15, 2007 press release, that "accounting measurement dates for most of the stock option grants to employees from July 1998 to May 2002 differed from the recorded grant dates.'" As a result of its improper accounting for stock options, Quest announced it would restate its financial statements for a 5-year period because its aggregate pre-tax, non-cash stock-based compensation expense between July 1998 to May 2002 was understated by approximately $150 million.
The class action complaint further alleged that Quest concealed its improper accounting for backdated stock options, and materially misrepresented the true amount of compensation Quest's executives and directors were receiving, and that they were issuing stock options in accordance with a shareholder-approved 1999 Stock Option Plan, when they were not.
Name (Stock Symbol)
Quest Software, Inc. (QSFT)
Quest Software, Inc. designs, develops, markets, distributes, and supports enterprise systems management software products.
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