SEC Goes After Trident CEO

WASHINGTON (CN) – Trident Microsystems CEO Frank Lin concealed “millions of dollars in expenses from the company’s shareholders” and doled out $37 million in unrecorded expenses by backdating stock options to “executives and other employees,” the SEC says.




     The SEC claims that Lin illegally distributed the goods for 13 years, from 1993 to 2006, in violation of the Securities and Exchange Acts.
     Lin defrauded Trident shareholders by selecting “grant dates for stock options that coincided with the dates of low closing prices for the company’s stock,” according to the federal complaint.
     Through the backdating, Lin enriched “employees, officers, and directors,” and himself, the SEC says.
     The SEC claims that Peter Jen, Trident’s Chief Accounting Officer, knew of the scheme and signed off on Lin’s backdating from at least as early as 1998.
     “Lin and Jen signed and/or approved of the filing of periodic reports with the [SEC] that they knew, or were reckless in not knowing, failed to include compensation expenses associated with the ‘in-the-money’ portions of the grants,” the SEC says.
     Trident is a tech company that designs and develops “System-on-Chip” systems for high-definition televisions.
     Lin, 64, of California, founded the company in 1987.
     Trident’s overstatement of its pre-tax income from 1993 to 2006, by backdating the option grants, totaled approximately $37 million in unrecorded expenses, according to the complaint.
     The SEC claims that Lin himself “received 1,899,000 shares from 10 stock option grants that were backdated,” and were worth more than $2 million when granted, amounting to $650,000 of ill-gotten gains for the CEO.
     Jen’s illicit take was just over $51,000, the SEC says.
     The SEC seeks disgorgement, an injunction and civil penalties.

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