SEC settles with Analog Devices for $4.5 million

Norwood chipmaker Analog Devices Inc. and its chief executive agreed to settle charges they backdated stock option grants from at least 1998 through 2002, the Securities and Exchange Commission said in a statement today.

Neither the company nor its chief executive, Jerald Fishman, admitted or denied wrongdoing, the SEC said. The parties agreed to pay a total of $4.5 million in penalties and other payments.

Stock options are rights to buy shares of a company in the future at the closing price on a certain day, and were widely used by technology companies in the 1990s under old accounting rules that made them cheaper to issue than other forms of compensation. But since 2005 academic studies have suggested many award dates were manipulated to benefits executives and other company insiders at the expense of shareholders.

That was also the case at Analog, the SEC claimed in papers released today, calling the company's backdating "a fraud on Analog's shareholders'' that gave Fishman and other insiders undisclosed compensation.
(By Ross Kerber, Globe staff)