U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20056 / March 27, 2007
Accounting and Auditing Release No. 2583 / March 27, 2007
SEC v. Myron F. Olesnyckyj, United States District Court for the Southern District of New York, Civil Action No. 07 CV 1176 (HB) (S.D.N.Y.)
The Securities and Exchange Commission ("Commission") today announced that it has settled its enforcement action against Myron F. Olesnyckyj, the former general counsel of Monster Worldwide, Inc. On March 26, 2007, the Honorable Howard Baer of the United States District Court for the Southern District of New York entered a final judgment that permanently enjoined Olesnyckyj from violating Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(b)(5) and 14(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1, 13b2-2 and 14a-9 thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder. In addition, the judgment permanently enjoined Olesnyckyj from acting as an officer or director of a public company. Olesnyckyj, without admitting or denying the allegations in the complaint, consented to the entry of this final judgment. In a parallel criminal action, Olesnyckyj pleaded guilty to one count of securities fraud and one count of conspiracy to commit securities fraud and has agreed to pay a forfeiture of $381,000. Olesnyckyj has not yet been sentenced in the criminal action.
On February 15, 2007, the Commission filed its action against Olesnyckyj. The complaint alleged that, from 1997 through 2003, Olesnyckyj backdated stock options grants to coincide with the dates of low closing prices for the Company's common stock, resulting in grants of in-the-money options to numerous individuals. When making grants of options, certain officers and employees at Monster would select a low closing stock price at which they wanted to grant stock options. Olesnyckyj, or others acting at his direction, then prepared backdated documentation for Monster's Compensation Committee containing the grant date that reflected the low closing price for Monster's common stock. Olesnyckyj then caused Monster to misrepresent in its periodic filings and proxy statements that all stock options were granted at the fair market value of the stock on the date of the award, when that was simply not the case. In fact, by backdating the options, Monster granted undisclosed compensation to its employees, failed to recognize compensation expenses, and overstated its net income by $340 million from 1997 through 2005. Olesnyckyj personally profited by receiving backdated options. The complaint further alleged that Olesnyckyj misled Monster's outside auditors in an attempt to hide the backdating scheme by providing documentation to them that misrepresented the grant date of the stock option awards.