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Options backdating fine homebuilding


The Seattle Times Company. Winner of Eight Pulitzer Prizes. S District Judge Otis Wright said the sentence, which also includes five years of probation and 2, hours of community service, was appropriate for a defendant who had no criminal history and had not been convicted of a violent crime.

He dismissed prosecutors' arguments that excusing the homebuilding giant's former CEO from a harsher sentence would invite claims that he was getting off easy because of his wealth. Karatz had no comment after the hearing as he traded handshakes and kisses with the smiling and teary-eyed supporters who had packed to courtroom.

Greg Boyle, who founded the Homeboy Industries anti-gang program.

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Karatz had become a Homeboy Industries volunteer since his conviction in April, court papers showed. Karatz was found guilty of two counts of mail fraud, one count of lying to company accountants and "Options backdating fine homebuilding" count of making false statements in reports to the Securities and Exchange Commission.

He was acquitted on 16 other counts and wright later overturned one of the mail fraud counts. The counts Karatz was convicted of stem from mid, when prosecutors said he concealed and lied about his role in the backdating.

A stock option allows an employee to purchase a company's stock at a preset price at a future date. Karatz retroactively tied the exercise price of his options to dates when the stock was selling for a low price, which increased his profit when he sold the shares. The maneuver is legal if it is properly accounted for and disclosed to investors. Otherwise, it can allow companies to overstate profits and underpay taxes.

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Prosecutors had claimed in a court filing that the Options backdating fine homebuilding of Karatz's offense overwhelmed the penalties recommended by a probation office recommendation on which Wright based his sentence.

The "recommendation suggests that there is a two-tiered system of justice, one for well-connected CEOs who can break the rules Wright was visibly angered by the suggestion that the recommendation, which he praised, was unfairly lenient. Karatz faced similar charges of manipulating stock options to a case involving several Broadcom Corp. Wright didn't allow Karatz's attorneys to pursue similar misconduct claims, saying he found no evidence of wrongdoing. Former human resources head Options backdating fine homebuilding Ray testified at trial that his ex-boss helped engineer and benefited from a shift in company policy for awarding stock options, then tried to conceal his moves from investors.

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Karatz's lawyers argued that he didn't knowingly break any laws and questioned Ray's credibility, noting that he pleaded guilty last year to conspiracy to obstruct justice and agreed to testify in return for leniency. Karatz, Ray and another KB Home executive were forced out in after the homebuilder discovered stock options had been favorably dated between and The probe found that no other senior executives had a role in the backdating scheme.

Wright said the loss of Karatz's career and the negative publicity he has received during his trial amounted to punishment that he has already "Options backdating fine homebuilding." When invited to address the court before hearing his sentence, the executive dedicated most of his remarks to his affiliation with Homeboy Industries, which he said had inspired him. The latest business headlines from the Northwest and beyond.

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