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CFOs May Rock Jailhouse

The stakes just got higher for financial executives ensnared in the options backdating investigation. Former SafeNet CFO Carole Argo was sentenced to six months in prison and fined $1 million.

By Staff Writer | Updated on March 01, 2008

The stakes just got higher for financial executives ensnared in the ongoing options backdating investigation by the Securities and Exchange Commission (SEC). In late January, former SafeNet CFO Carole Argo was sentenced in U.S. District Court in New York to six months in prison and fined $1 million for her role in the improper timing of millions of dollars of employee stock option grants between 2000 and 2006.

The jail sentence–the first for a CFO–is considered a harbinger os prosecutions to come by some legal experts. “I think that this is the tip of iceberg and more corporate executives, including CFOS, will be held responsible,” says attorney Jacob Zamansky, a former prosecutor who represents shareholders. “CEOs and CFOs should be held criminally accountable in egregious situations where they participate in fraud.”

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