Wireless Facilities Inc. 03/15/2007
The Complaint alleges that WFI and certain officers and directors violated Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934 by making false and misleading statements and omissions concerning WFI’s improper and undisclosed practice of backdating options conferred on certain executives, which made it appear that such options were issued upon dates when the market price of WFI stock was lower than actual market price on the actual grant dates, thereby masking the profits the option recipients obtained. Under generally accepted accounting principles, these profits were required to be recognized as an expense in the Company’s financial statements for the appropriate period, but were not. This backdating of options also violated provisions of the Internal Revenue Code relating to deduction of option payments. Thus, the Complaint alleges, the Company’s financial statements in Form 10-K filings for the years 2000, 2001, 2002, 2003, 2004 and 2005 and Form 10-Q quarterly filings were materially false and misleading.