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U.S. Securities and Exchange Commission


Litigation Release No. 21278 / November 4, 2009

Accounting and Auditing Release No. 3065 / November 4, 2009

Securities and Exchange Commission v. James J. Treacy, et al., Civil Action No. 08 CV 4052 (RJS) (S.D.N.Y.)

Court Enters Permanent Injunction and Other Relief against James Treacy in Stock Options Backdating Case

The Securities and Exchange Commission (“SEC”) today announced that on November 3, 2009, the Honorable Richard J. Sullivan of the United States District Court for the Southern District of New York entered a final judgment of permanent injunction and officer and director bar against James J. Treacy, the former president and Chief Operating Officer of Monster Worldwide, Inc. Without admitting or denying the SEC’s allegations, Treacy consented to the entry of the final judgment. The judgment settles the SEC’s claims against Treacy in a civil action filed on April 30, 2008, in which the SEC alleged that Treacy engaged in a fraudulent scheme to backdate option grants while he was an officer of Monster.

The SEC’s complaint alleged that Treacy 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. As a result of this 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 final judgment: (i) permanently enjoins Treacy from future violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(b)(5), 14(a) and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1, 13b2-2, 14a-9 and 16a-3 thereunder, and from aiding and abetting violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder; and (ii) imposes a permanent bar from acting as an officer or director of a public company. The SEC withdrew its request for disgorgement and civil monetary penalties in light of the jail sentence, forfeiture and restitution ordered in United States v. James J. Treacy, 08 CR 0366 (JSR) (S.D.N.Y.).

For additional information about Treacy as well as other litigation associated with the backdating of stock options at Monster, please see Litigation Release No. 21042 (May 18, 2009), Litigation Release No. 20554 (April 30, 2008), Litigation Release No. 20435 (January 23, 2008), Litigation Release No. 20056 (March 27, 2007), and Litigation Release No. 20004 (February 15, 2007).




Modified: 11/03/2009