Monster President Convicted of Fraud

     MANHATTAN (CN) – The former president and COO of Monster Worldwide was convicted Tuesday of securities fraud and conspiracy. After a three-week trial a federal jury found that James J. Treacy under-reported Monster’s “compensation expenses” by more than $300 million between 1997 and 2005, often in the form of stock options.

     “For example, Monster’s Form 10-K for 2001 reported that Monster’s net income was $69,020,000. However, after Monster later, in 2006, correctly recorded the appropriate compensation expense for the backdated options, the company’s net income for that period dropped to $3,439,000,” the U.S. Attorney’s Office said in a statement. “Treacy himself, while employed at Monster, received in excess of one million backdated options (adjusted for a stock split and a spin-off of a Monster division) on eight different grant dates. Between December 2005 and April 2006, just before the backdating scheme was disclosed, Treacy exercised approximately 745,000 of those options for a total gain of more than $24 million.”
     Treacy faces up to 25 years in prison and fines at his Aug.25 sentencing before U.S. District Judge Jed Rakoff.

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