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Ex-boss indicted for stock fraud
By Edvard Pettersson |
March 7, 2009, Saturday
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Print Edition
Print Edition
BRUCE Karatz, the former chief executive officer of KB Home, an American home builder, was indicted in an alleged scheme to defraud shareholders by awarding himself and other executives millions of dollars in undisclosed stock options, United States prosecutors said yesterday.
The indictment contains 20 counts including securities fraud, US Attorney Thomas O'Brien said. If convicted on all counts, Karatz, 63, faces a possible sentence of 415 years in prison.
"We are disappointed that during this economic collapse the government chooses to waste its resources on backdated options, an issue that has long ago been fixed at KB Home and generally in the corporate world," John Keker, Karatz's lawyer, said in a statement. "But since they made that choice, we will show a jury that Bruce Karatz" acted appropriately.
Gary A. Ray, KB Home's former head of human resources, pleaded guilty last month to conspiring with Karatz to obstruct a US Securities and Exchange Commission investigation of improper options backdating at the home builder. Karatz was chairman as well as CEO of Los Angeles-based KB Home until he stepped down from both positions in 2006 after a probe by the company uncovered the backdating.
Karatz is due to appear in court on March 26.
The indictment contains 20 counts including securities fraud, US Attorney Thomas O'Brien said. If convicted on all counts, Karatz, 63, faces a possible sentence of 415 years in prison.
"We are disappointed that during this economic collapse the government chooses to waste its resources on backdated options, an issue that has long ago been fixed at KB Home and generally in the corporate world," John Keker, Karatz's lawyer, said in a statement. "But since they made that choice, we will show a jury that Bruce Karatz" acted appropriately.
Gary A. Ray, KB Home's former head of human resources, pleaded guilty last month to conspiring with Karatz to obstruct a US Securities and Exchange Commission investigation of improper options backdating at the home builder. Karatz was chairman as well as CEO of Los Angeles-based KB Home until he stepped down from both positions in 2006 after a probe by the company uncovered the backdating.
Karatz is due to appear in court on March 26.
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