Cablevision Granted Options After Exec’s Death
By John M. Higgins -- Broadcasting & Cable, 9/22/2006 8:40:00 AM
Caught in a scandal over stock option games, Cablevision Systems acknowledged that it granted options of one of its executive after he died.
The disclosure is an apparent reference to late vice chairman Marc Lustgarten, who was an officer at the time of his death from pancreatic cancer in 1999.
A Cablevision spokeswoman would not identify the executive, saying the company would not comment beyond a Securities and Exchange Commission filing submitted Thursday. However, the company said in the filing that it has received a grand jury subpoena from the U.S. Attorney’s office and a civil request from the SEC for documents related to options issues
The disclosure adds a new twist to inquiries into Cablevision options grants, which has attracted attention from both civil and criminal investigators. The scandal centers on backdating options to a date when their exercise price would be substantially lower than the market price on the date they were granted.
In the case of Cablevision, it admits giving the options to a dead man, but assigning them a date on which he was still alive.
Cablevision did not detail what it did with the options. Securities and Exchange Commission filings state that Lustgarten’s estate held options covering 585,000 shares nine months after he died and kept some of them at least until 2003.
Cablevision also disclosed that it granted similarly favorable treatment to, of all people, a compensation consultant, thought the consultant’s option grant was canceled in 2003.
However the company has not identified other, living executives who received favorable treatment. However, director Richard Hochman resigned from the compensation and audit committees of Cablevision’s board of directors and Victor Oristano resigned from the audit committee. They did not, however, resign from the board itself.
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