WWW- Google Inc. said U.S. regulators won’t pursue a probe into whether its founders violated disclosure rules by talking to Playboy magazine https://www.adultfyi.com/read.aspx?ID=5322 before the company’s initial share sale. The company also settled claims it failed to register stock options before the offering.
In settlements today with the U.S. Securities and Exchange Commission and the California Department of Corporations, Google, the most-used Internet search engine, and company general counsel David Drummond agreed to avoid future violations. They didn’t pay a fine or admit or deny the allegations.
The settlement caps inquiries over two missteps Mountain View, California-based Google made before its Aug. 18 initial public offering, the biggest ever for a Web company. Before the IPO, Google said the SEC might force it to buy back shares because of the Playboy interview with founders Sergey Brin and Larry Page.
“This puts a footnote, that embarrassing piece of history for Google’s management team, behind them,” said Laura Martin, an analyst with Soleil Securities in Pasadena, California, who rates Google shares “hold” and doesn’t own them.
Google shares rose 85 cents to $196.23 at 1:23 p.m. New York time in Nasdaq Stock Market trading. They have more than doubled since the company first sold shares to the public.
Google failed to register more than $80 million in employee stock options during the two years before the share sale, the company said in the settlement with the SEC.
SEC rules prohibit private companies from issuing more than $5 million in stock options during a 12-month period without providing detailed financial statements to the recipients of the options.
“Companies cannot freely decide that they don’t need to comply with the law,” Stephen Cutler, director of the SEC’s enforcement division, said in a statement.
Drummond didn’t advise Google’s board that some option grants might require disclosure, the SEC said in a filing. The general counsel thought the disclosures might place Google at a strategic disadvantage with its competitors, the SEC said.
“We are pleased there will be no further proceedings regarding the Playboy article and we are satisfied with the settlement on the stock option issues,” Steve Langdon, a Google spokesman, said in an e-mailed statement. “We are glad to have these issues behind us.”
In November, Google said Georgia officials requested information about securities issued by the company that weren’t registered under state laws.
The state issued a formal hearing process into options Google issued from 1998 through 2003.
Tonya Curry, assistant commissioner of securities for Georgia, didn’t immediately return a voice mail message today seeking comment.
In August, Connecticut’s securities regulator said it was also conducting an inquiry. A voice mail message for Ralph Lambiase, director of the Connecticut Division of Securities, wasn’t immediately returned.