At the time of the announcement, the co-acting regional director of the SEC’s San Francisco office stated, among other things, that [the SEC] did not believe that the [lack of] cooperation and remediation [shown by Marvell] merited a whole lot of credit in terms of giving [Marvell] a break.
Marvell restated its financial results, and stated that Dai will no longer be executive vice president, chief operating officer, and a director but continue with the company in a non-management position.
Before DUBINA, Chief Judge, BIRCH and BLACK, Circuit Judges. Under Generally Accepted Accounting Principles (“GAAP”) Board Opinion No. The accounting experience of some of the Jabil executives, however, fails to provide the critical distinction here because the shareholders do not plead any facts that indicate that any individual Appellee knew about the accounting irregularities during the class period.
THIS SCORECARD WAS LAST UPDATED IN SEPTEMBER 2007 AND IS NO LONGER BEING UPDATED. Note: This list contains companies that have disclosed government probes, misdated options, restatements and/or executive departures as of Septmeber 2007. In the wake of an article by the Wall Street Journal surmising that Jabil’s CEO may have received backdated stock options because the options he received were consistently timed at a low price and followed up by a significant price increase, and an informal investigation by the SEC, Jabil formed a special committee to examine the allegations. Third, plaintiffs alleged that defendants made false projections regarding the company’s business conditions in violation of Section 10(b) and Rule 10b-5. Among other things, plaintiffs did not plead particularized facts indicating that the individual defendants knew that any accounting standard was being violated or plead each individual defendant’s trading history to support a showing that his class period stock sales were “dramatically” out of line with prior trading practices or otherwise sufficiently suspicious to support a strong inference of scienter. 25 (“APB 25”), which requires that options be recorded as a compensation expense to the corporation upon issuance if the exercise price is below fair market value. Second, plaintiffs alleged that the individual defendants engaged in insider trading in violation of Section 10(b) and Rule 10b-5, as well as Section 20A of the 1934 Act. The Eleventh Circuit held, however, that the allegations of the amended complaint, viewed individual and in the aggregate, failed to raise a “cogent and compelling” inference that the company and its senior management acted intentionally or with severe recklessness in connection with Jabil’s accounting for stock options. The company did this, plaintiffs alleged, despite representations by the company in filings with the Securities and Exchange Commission (“SEC”), including proxy statements, that the exercise price of stock options was always “at least equal to fair market value.” The company also represented in its SEC filings that its accounting for employee stock options complied with Accounting Principles Board Opinion No. Disagreeing with the district court, the Eleventh Circuit held that Jabil’s restatement of its financials sufficed to support a finding that the company’s SEC filings contained false statements. This decision represents the most recent effort by the Eleventh Circuit to apply the heightened pleading requirements of the Private Securities Litigation Reform Act of 1995 (“Reform Act”) and the Supreme Court’s decision in Tellabs, Inc. Plaintiffs alleged that Jabil issued stock options to executives and employees that were “backdated,” such that their exercise or strike prices were lower than the market price of Jabil’s stock on the true dates of their issuance. On appeal, the Court took a slightly broader view of plaintiffs’ allegations, but nonetheless affirmed the dismissal of the amended complaint.