Govt. Probes Vitesse Option Grants

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Vitesse Semiconductor Corp. said late Thursday that it received a grand jury subpoena from federal prosecutors for information about how it awarded stock options, part of a widening probe by the government into possibly improper stock option practices among companies.


Camarillo-based Vitesse became the fifth company this week to disclose a subpoena by U.S. authorities, in this instance the U.S. Attorney for the Southern District of New York requesting documents dating from 1999. The company also disclosed that the Securities and Exchange Commission’s enforcement division is conducting its own probe of the company, and has requested documents from January 1995 through the present related to stock options.


The company said it plans to cooperate fully with both the SEC and the U.S. Attorney. Vitesse on Wednesday fired Chief Executive Louis Tomasetta and two other top executives over the controversy.


Regulators are trying to determine whether the companies may have improperly changed the date of when they awarded stock options to executives, a practice called backdating, which violates securities laws.

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