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SEC Charges Two Former Monster Worldwide Executives for Backdating Options


Washington, D.C., April 30, 2008 — The Securities and Exchange Commission today charged two former senior executives at Monster Worldwide, Inc., for their alleged participation in a multi-year scheme to secretly backdate stock options granted to thousands of Monster officers, directors and employees.

The SEC’s complaint, filed in the District Court for Southern District of New York, alleges that Monster’s former president and chief operating officer James J. Treacy and former controller Anthony Bonica participated in a scheme that began in 1997 to fraudulently backdate stock options to coincide with the dates of low closing prices for the New York-based company’s common stock.

“These defendants circumvented disclosure requirements and accounting principles designed to provide investors with an accurate picture of a company’s performance. Our enforcement action today demonstrates yet again that the Commission will not tolerate deception of investors through unlawful options backdating and will aggressively pursue those responsible,” said Linda Thomsen, Director of the SEC’s Division of Enforcement.

“These individuals caused Monster to mislead its investors by failing to report hundreds of millions of dollars of expenses,” said Kay Lackey, Associate Director of the SEC’s New York Regional Office. “The Commission will continue to hold corporate executives accountable for such fraudulent actions.”

The SEC is alleging that this scheme resulted in grants of in-the-money options to numerous individuals without Monster properly describing its options practices in its public filings or properly accounting for these options in its financial statements. As a result of their conduct, Monster misrepresented that all stock options were granted at the fair market value of the stock on the date of the award, when that was not the case. Monster also filed materially misstated financial statements with the SEC in its Forms 10-K and 10-Q that did not recognize compensation expense for the company’s stock option grants, as required by generally accepted accounting principles. As a result, Monster overstated its aggregate pre-tax operating income by approximately $339.5 million for fiscal years 1997 through 2005.

The SEC’s complaint further alleges that Treacy and Bonica personally benefited from the fraudulent scheme by receiving and exercising backdated grants of in-the-money options.

The SEC is charging Treacy and Bonica with violations of the antifraud provisions of the federal securities laws and with violating or aiding and abetting the violation of reporting requirements as well as other violations. The Commission is seeking permanent injunctive relief, disgorgement of ill-gotten gains and financial penalties from each defendant, as well as an officer and director bar against Treacy.

The Commission acknowledges the assistance of the U.S. Attorney’s Office for the Southern District of New York and the U.S. Postal Inspection Service, which conducted their own separate, parallel investigation resulting in distinct criminal charges against Treacy.

The SEC’s investigation in this matter is continuing.

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For more information, contact:

Kay Lackey
Associate Director
SEC’s New York Regional Office
(212) 336-0117



Modified: 04/30/2008