SEC Charges Monster Worldwide Inc. for Backdating Scheme

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Washington, D.C., May 18, 2009 — The Securities and Exchange Commission today charged employment search provider Monster Worldwide, Inc. for its multi-year scheme to secretly backdate stock options granted to thousands of Monster officers, directors and employees.

Monster agreed to pay a $2.5 million penalty to settle the SEC's charges that the company defrauded investors by granting backdated, undisclosed "in-the-money" stock options while failing to record required non-cash charges for option-related compensation expenses.

"Monster misled investors by failing to report hundreds of millions of dollars of expenses. Backdating stock options made the company look like it had more money than it really did," said James Clarkson, Acting Regional Director of the SEC's New York Regional Office.

The SEC's complaint, filed in the District Court for Southern District of New York, alleges that in connection with this scheme, Monster filed false and materially misleading statements concerning the true grant date and exercise price of stock options in its annual, quarterly and current reports, proxy statements and registration statements. Many of these documents also falsely represented that stock options were being granted at fair market value. Further, Monster failed to record and disclose the compensation expense associated with the "in-the-money" portion of stock option grants. As a result, Monster materially overstated its quarterly and annual earnings in its financial statements and was required to restate its historical financial results for 1997-2005 in a cumulative pre-tax amount of approximately $339.5 million to record additional non-cash charges for option related compensation expenses.

Without admitting or denying the SEC's allegations, Monster has agreed to pay a $2.5 million penalty and consent to the entry of an order permanently enjoining it from violating the antifraud, reporting, record-keeping and internal controls provisions of the federal securities laws. The Commission took into account the cooperation that Monster provided Commission staff during the course of the investigation. Monster currently operates under new management.

The SEC previously charged four of Monster's former executives including CEO Andrew McKelvey, President and COO, James Treacy, General Counsel, Myron Olesnyckyj, and Controller, Anthony Bonica, for their alleged roles in the backdating scheme at Monster.

The Commission acknowledges the assistance of the U.S. Attorney's Office for the Southern District of New York and the U.S. Postal Inspection Service, which conducted their own separate, parallel investigation.

Source: SEC