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VeriSign to Restate $250M Following Options Probe

Internet security company VeriSign will be forced to restate as much as $250 million in earnings during 2001 to 2005 and part of 2006 due to what it termed "incorrect measurement dates" and other administrative blunders.

The non-cash charge to the financial statements for periods 2001-2005 is not expected to exceed $250 million, the company said in a statement. The investigation is ongoing.

The Mountain View, Calif.-based VeriSign said it is evaluating its internal controls on financial reporting and is in talks with its accounting firm, KPMG.

VeriSign expects the internal investigation to conclude by the end of the year, at which time the company will file a restated earnings report with the Securities and Exchange Commission.

The decision comes as the company's internal probe into past stock option practices continues.

Prior to today's news, VeriSign was told by the Nasdaq stock exchange that delays in filing financial information in August and November put the company in noncompliance. The online security firm is also fighting Nasdaq delisting.

Although stock-option grants are often seen as a valuable incentive to attract and retain top employees, dozens of companies have run afoul of new laws that change how those stock options are counted.

Online job site Monster today announced the termination of Myron Olesnyckyj, the company's senior vice president, general counsel and secretary, following Monster's review of stock-option grant practices. The dismissal of Olesnyckj by the Monster board of directors follows the executive's suspension in September.

Monster's founder and CEO, Andrew McKelvey, was one of several company CEOs who resigned in October as a result of unrelenting questions over the practice of granting backdated stock options.

Other company executives to lose their posts due to questionable stock-option grants included George Samenuk, the CEO of security vendor McAfee, and Shelby Bonnie, co-founder and CEO of online news company CNet.

As internetnews.com reported, the stock options backdating scandal began earlier this year when a public interest group, the Center for Financial Research and Analysis, published a survey indicating the tech industry was heavily involved in the practice of backdating options.