Concern about the questionable timing of executive stock options spread across the technology sector yesterday after two high-profile California-based companies said they had been approached by US authorities seeking documents explaining their stock options practices.
The development comes amid mounting suspicion that executives at about 20 US companies in a range of businesses were awarded options just before a sharp rise in company share prices.
That has led prosecutors and the Securities and Exchange Commission to launch probes into whether the timing was coincidental with the subsequent share price rises or the result of fraudulent backdating.
The revelations about those companies refer to a period spanning the mid-1990s to 2002. They carry echoes of the white-collar crimes that are the focus of the Enron trial where a jury verdict is expected imminently.
Yesterday Openwave, a maker of wireless software, said it had received a letter from the SEC requesting documents related to the company's stock option grants and stock option practices.
Juniper Networks, a network solutions provider, said it had received a request for information from the office of the US Attorney for the Eastern District of New York for the same reason.
Companies already under investigation by the SEC include RSA Securities, which specialises in online identity protection and American Tower Corp, an operator and developer of broadcast and wireless communications sites. Merrill Lynch released a study yesterday of the US semiconductor index showing that some companies had "consistently generated excess returns" from options grants.
