Intuit Inc. is among the latest companies receiving an informal inquiry from the Securities and Exchange Commission regarding its stock option granting practices.
Intuit, whose products include the QuickBooks line, joins more about 25 companies currently under investigation by the SEC or Justice Department. The federal agencies have said that among other practices they are looking into potential illegal backdating, which can violate securities laws if not disclosed to shareholders, and "spring-loading" options by offering them to workers ahead of anticipated value jumps.
Intuit said that before the SEC made its inquiry, the company had already been conducting its own options review.
"Our board of directors has formed a special committee of independent directors to conduct this internal review with the assistance of independent legal counsel and independent accounting support, and the review is underway and ongoing," the filing said.
The company said that it believes the financial statements in its quarterly report fairly present its financial condition, but added that, "There can be no assurance that we will not determine that we need to change our accounting treatment of stock options granted in prior periods, which may have a material adverse effect on our results of operations for those periods or other periods."
While Intuit didn't specify which options it was examining, several published reports have pointed out one 2000 option that was especially lucrative and was singled out by an analyst in a report. In May 2000, Intuit granted options to chief financial officer Greg Santora, allowing him to buy 100,000 shares of the stock for $26.125, which was the lowest closing price of the year. Santora retired in the summer of 2002 and made about $2.7 million by fully exercising that option the same year, when Intuit stock was trading at about $52.85.
Separately, Symantec, the largest maker of anti-virus software, has agreed to pay $36 million to settle a tax claim after an audit of its 2003 and 2004 fiscal years. The amount, excluding interest, is less than the Internal Revenue Service's initial assessment of about $100 million, the company said.
Symantec is appealing a separate IRS claim for about $900 million in taxes connected to its purchase of recovery software concern Veritas Software in July 2005. The amount in dispute is for Veritas's 2000 and 2001 taxes.
Previously on WebCPA:
IRS Chasing Symantec for $1B in Taxes (April 19, 2006)
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