SAN FRANCISCO (CN) – The three top executives of Embarcadero Technologies fraudulently backdated stock options grants to employees and lied in reports to shareholders, the SEC claims in Federal Court. It sued and settled with CEO Stephen Wong; former CFO Raj Sabhlok and former Controller Michael Pattison are going to court.
Embarcadero made hundreds of backdated stock options grants during 16 consecutive quarters, the SEC said. It overstated its income and understated its losses – in one year, Embarcadero understated its net losses by more than 500 percent, the Commission says.
Sabhlok and Pattison used false documents to justify awarding themselves in-the-money stock options worth almost $1.5 million, the complaint states.
Wong settled for a $250,000 penalty and a 5-year bar on serving as officer or director of a public company. Sabhlok and Pattison are going to court.