Ex-KB Home CEO pleads not guilty

WILL STAND TRIAL Bruce Karatz allegedly awarded himself and others millions in undisclosed compensation by backdating options.

LOS ANGELES - Former KB Home chief executive Bruce Karatz pleaded not guilty to charges that he backdated stock options granted to him and others to increase their value and then obstructed an investigation.

Karatz entered the plea at an arraignment hearing yesterday in federal court in Los Angeles, Assistant US Attorney Paul Stern said. A provisional trial date was set for May 19.

Karatz, who led the Los Angles-based home builder, was indicted March 5 in an alleged scheme to defraud shareholders by awarding himself and other executives millions of dollars in undisclosed compensation through options backdating. Karatz, 63, faces up to 415 years in prison if convicted on all 20 counts he's charged with, including securities fraud.

Karatz's lawyer, John Keker, did not immediately return a call for comment.