SEC Sues HCC Insurance For Backdating

HOUSTON (CN) - HCC Insurance Holdings and its CEO and general counsel backdated millions of dollars worth of stock options from 1997 to 2005 and did not properly record it, understating HCC's expenses and overstating its income, the SEC claims in Federal Court.

The SEC says the defendants, CEO Stephen Way and General Counsel Christopher Martin, did this on at least 38 occasions and as many as 58. Way made $5.5 million from the backdating, and Martin got $100,000 - both have repaid the money to HCC, the complaint states. They failed to report $26.6 million in stock payments during the period, the SEC says.

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