Westwood One Hit With Suit Over Backdated Stock Options
November 1, 2006 at 5:58 AM (PT)
WESTWOOD ONE is the latest target of a shareholder lawsuit over backdated stock options filed by NEW YORK law firm STULL, STULL AND BRODY.
The firm, which has also recently filed similar suits against companies like MATTEL; BED, BATH AND BEYOND; MEDAREX; and CLOROX, says that it's investigating more suits against over 50 more companies for the same practice.
It alleges that WESTWOOD ONE officers and directors "manipulated the prices of executive and director stock option grants. Such practice of awarding stock options to executives and directors at artificially low prices is alleged to violate the company's internal documents (such as the company's stock option plan), as well as state laws governing officer and director fiduciary duties and/or federal laws governing securities and taxation.
"In addition, the practice results in lower payments to companies, results in those companies under-reporting compensation expenses, and permits directors, officers and/or executives to unjustifiably reap millions and billions of dollars which should be disgorged and returned to the corporate coffers, thereby contributing to the financial health of the company."