Altera under investigation for stock options granting

The U.S. Securities and Exchange Commission (SEC) and the U.S. Attorney for the Northern District of California are looking into historical stock options granting practices at programmable logic supplier Altera Corp., the company said last week.

The company said it has been notified that two shareholder derivative lawsuits have been filed in the California Superior Court "by persons identifying themselves as Altera shareholders and purporting to act on behalf of Altera," naming the company as a nominal defendant and naming some of the company's current and former officers and directors as defendants.

Altera said the SEC opened an inquiry after the disclosure May 8 that the company's board of directors established a special committee of directors to review historical stock option practices and related accounting. Altera's management notified the board after uncovering potential issues with options granted from 1996 though 2000. Altera said it received a subpoena from the office of the U.S. Attorney at an unspecified time.

Altera said it has been granted a requested a hearing in response to a Nasdaq staff determination notice threatening to delist the company's security from the market for failing to submit its most recent quarterly report in a timely manner. The company has said it would delay filing the quarterly report pending the outcome of its internal investigation. Altera said the delisting has been stayed pending the hearing.

At the hearing, Altera said it plans to explain the reasons for the company's non-compliance with Nasdaq listing regulations and the company's proposed plan for regaining compliance. Once the hearing concludes, it may take up to several weeks for the Nasdaq to release its decision, and the delisting would be stayed pending that decision, Altera said. There are also opportunities to seek an extension of time and to appeal Nasdaq's decision, if required, the company said.

Altera is one of a growing number of electronics to be implicated in the stock option granting controversy. Several of these companies have acknowledged being targeted by inquiries from the SEC and U.S. Attorney.

- Dylan McGrath
EE Times