Sweeping management changes have been instigated at Mercury Interactive following an official investigation into irregular allocations of the company's stock.
Self-styled business technology optimization specialist Mercury has accepted the resignations of chief executive officer (CEO) Amnon Landan, chief financial officer Douglas Smith, and general counsel Susan Skaer following a year-long investigation initiated by the US Securities and Exchange Commission (SEC).
Mercury named president and chief operating officer Anthony Zingale as CEO and senior vice president for corporate development David Murphy as chief financial officer.
The probe found forty-nine instances in which the stated date of stock option grants was different from the date on which the options appear to have been actually granted. The price was higher on the actual date than the stated grant date. The allocations took place over a 10-year period from 1995.
Mercury said in a statement that Landan, Smith and Skaer were each aware of, and to varying degrees, participated in the practices, and that grants were made to all levels of employees. "Each of them knew or should have known that the practices were contrary to the options plan and proper accounting," Mercury said. "Each of them also benefited personally from the practices."
The case is particularly ironic as Mercury delivers a suite of software and services that help corporations achieve good governance and comply with regulations like the Sarbanes Oxley Act (SOX) - conceived to end corporate scandals.
Fall out from the changes means Mercury is not now in a position to provide third-quarter financial results, which were expected Wednesday afternoon, as it is assessing the impact on current and past financials. The company said it was unlikely it would have to re-state historical results as a result of the misdated stock grants.®