The company has also fired its former general counsel, Myron Olesnyckyj, who was largely responsible for administering the company’s stock options plan and later pled guilty to charges of securities fraud. Prosecutors didn’t specify what the condition was and a Monster spokeswoman didn’t return phone or e-mail messages seeking comment, but The Wall Street Journal reported that Mc Kelvey has pancreatic cancer and that his prognosis is poor.Under Monster’s settlement with Mc Kelvey, he will pay the company million and also convert the 4.76 million shares of supervoting stock he controls into ordinary shares, reducing his voting power in the company from 31 percent to 7.4 percent.“If you don’t appreciate that, it’s very difficult for the government to show that you’re a criminal.” The SEC could still punish or fine Jobs.But the agency has not notified Jobs of plans to bring civil charges against him, according to a lawyer familiar with the SEC probe.
Mc Kelvey departed Monster in 2006 amid questions about his role in the options backdating scandal. Attorney’s office for the Southern District of New York said in a statement that it reached the settlement with Mc Kelvey, who is 73 years old, in light of the fact that he had a terminal medical condition.While Mc Kelvey himself didn’t receive backdated options, the SEC said he benefited from the scheme by giving the options to four people that he employed personally, including three pilots and a mechanic.The SEC said that the misstatements resulted in Monster overstating its pretax earnings by 9.5 million in the fiscal years 1997 through 2005.An internal audit also found no wrongdoing by Jobs at Pixar, where similar evidence has turned up general backdating of options on his watch as CEO there.“When you start thinking about lying, cheating and stealing, there’s a mental state that you know what you’re doing is wrong,” said Jeffrey Bornstein, a former federal prosecutor in San Francisco not involved in the Apple case.Current and former federal prosecutors knowledgeable about the probes say investigators are focusing most on cases where there is proof that executives hid backdating or used the tactic to profit themselves.In Apple’s case, the company has admitted the grant to Jobs, approved in December 2001, was backdated by two months and that the grant documents were falsified, an act that has been condemned by everyone involved in the matter.An internal investigation released in December found no evidence of wrongdoing by Jobs, but that did not remove the cloud of suspicion over the company’s powerful CEO. From the start, the focus has been Jobs’ 2001 receipt of 7.5 million options that were backdated through minutes of a board of directors meeting that never occurred.But while others involved in the falsified minutes may face consequences, Jobs appears insulated against criminal prosecution and perhaps SEC action.Mc Kelvey agreed to the SEC settlement without confirming or denying the agency’s accusations against him.Monster has been plagued with other senior management turnover since Mc Kelvey’s departure.