Monster Worldwide close to closing book on stock scandal

Posted by on Oct 7, 2008 in Recruitment

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Monster Worldwide has announced further progress in putting its stock-options scandal behind it. One tentative settlement announced during the employment-site company’s earnings call on July 31 has been made final, while another announced the same day has come closer to closure.

The company reported today that the Supreme Court of the State of New York (where Monster is headquartered) issued an order granting final approval of the settlement of state and federal court derivative lawsuits arising out of the company’s backdating of stock options. Monster will receive $10 million in cash while class B stock held by former CEO Andrew McKelvey, one of the execs implicated in the scandal, will be converted to ordinary shares of commons stock. Some outstanding stock options and restricted stock units will be canceled.

Meanwhile, the U.S. District Court for the Southern District of New York granted preliminary approval of the previously announced settlement of the shareholder class-action lawsuit arising from the options scandal. A hearing on final approval of the class action is scheduled for Nov. 21.

The lawsuits arose due to violations of securities law by Monster, its former CEO and chairman Andrew J. McKelvey and its former general counsel and SVP Myron Olesnyckyj. Shareholders said they lost millions when the company and the two execs backdated stock options. Plaintiffs in the class action are slated to receive $47.5 million, though Monster said it will only pay about $25 million because insurance and a contribution from another defendant will cover the rest of the settlement.

 

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Written by Jim Townsend

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