The former controller of Monster Worldwide has been ordered to disgorge over $209,000 in ill-gotten gains, penalties and interest in connection with a stock options backdating case.
Anthony Bonica, a CPA who formerly served as controller of the online job site company, was also enjoined from direct and indirect violations of the federal securities laws last Friday by the U.S. District Court for the Southern District of New York.
The Securities and Exchange Commission filed a civil injunctive action on April 30, 2008, against Bonica and Monsters former president and COO James J. Treacy. The SECs complaint alleged, among other things, that Bonica participated in a fraudulent stock option backdating scheme, and that his fraudulent conduct caused Monster's periodic filings and proxy statements to falsely portray Monster's options as having been granted at exercise prices equal to the fair market value of Monster's common stock on the date of the grant, when, in fact, Monster was granting in-the-money options.
The SEC also claimed that Bonica understood the accounting consequences of granting in-the-money options but did nothing to ensure that Monster properly accounted for these options in its financial statements. The complaint alleged that Bonica's conduct caused Monster to file materially false and misleading public reports that contained financial statements that materially understated Monster's compensation expenses and materially overstated its quarterly and annual net income.
On Dec. 13, 2006, Monster restated its historical financial results for 1997-2005 in a cumulative pre-tax amount of approximately $339.5 million to record additional non-cash charges for option related compensation. The complaint further alleged that Bonica benefited from the scheme, including the receipt and exercise of backdated grants of in-the-money options.
Without admitting or denying the SEC's allegations, Bonica consented to the entry of the final judgment, which permanently enjoined him from violating securities laws. He also consented to pay $115,736.71 in disgorgement of ill-gotten gains, $33,800.89 in prejudgment interest and a penalty of $60,000.
In separate administrative proceedings to be instituted, Bonica also has consented to the entry of an order suspending him from appearing or practicing before the SEC as an accountant, with a right to request that the SEC consider his reinstatement after three years.
