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Report: Deloitte knew of Micrel stock options deal
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Spencer Chin
EE Times
(06/01/2006 4:31 PM EDT)
MANHASSET, N.Y. — Mixed-signal chip supplier Micrel Inc. alleges in a lawsuit that Deloitte & Touche LLP, its former auditor, signed off on stock options that were granted in a similar way to the stock options practices now under investigation, according to a Wall Street Journal report Thursday (June 1).
The report quoted Micrel Inc. (San Jose) as stating in a 2003 lawsuit that Deloitte endorsed an arrangement enabling an option to be struck at the stock's lowest price within 30 days of the option being granted.
The Wall Street Journal article was quoted as saying Deloitte was negligent in its work for the company, and cost Micrel $50 million in expenses because Deloitte required it to restate results for three years because of how the options were granted.
Deloitte (Wilton, Conn.) has denied the charges, according to the report.
Micrel has come under fire in recent years for its financial practices. In August 2004, an Internal Revenue Service auditor said she was forced by the agency to sign off on a secret deal where Micrel was given a tax break for admitting it had run a stock options plan in violation in the law. Micrel denied it took part in any such deal, according to a New York Times report.
Several dozen companies are being investigated for their practices in backdating stock options (see stock options scandal coverage page).
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