Ex-Monster CEO Treacy's 2009 Conviction for Backdating Is Upheld on Appeal - 9 Mar 2011

Former Monster Worldwide Inc. (MWW) Chief
Operating Officer James Treacy’s 2009 conviction for improperly
accounting for backdated stock options was upheld by an appeals
court that found his $6.3 million forfeiture was incorrect.

The U.S. Court of Appeals in New York today also ruled that
U.S. District Judge Jed Rakoff, who presided over the case in Manhattan, committed a “harmless” error by limiting Treacy’s
lawyer’s cross-examination of a Wall Street Journal reporter.
Rakoff restricted the defense’s questioning, citing the
journalist’s privilege.

Rakoff erred in calculating Treacy’s forfeiture and
restitution, the three-judge appeals court panel said. Rakoff
should recalculate the forfeiture based on a Dec. 9, 1998,
option grant, instead of the April 19, 1999, date he used, the
judges said. They agreed with Treacy that the change would
reduce the amount he must forfeit.

Treacy was sentenced in September 2009 to two years in
prison. He is expected to be released in August, according to
Federal Bureau of Prisons records.

“We’re studying the opinion and we’re weighting our next
step,” Bruce Bishop, a lawyer for Treacy, said in a telephone
interview.

Backdated Grants

Prosecutors said Treacy backdated options at New York-based
Monster, the world’s largest online-recruiting company, by
treating them as if they were granted on dates when Monster’s
stock price was at or near a periodic low. None of the grants
were recorded as compensation expenses, as the law requires,
prosecutors said.

Treacy earned at least $14.5 million from the scheme,
including profits

more...