MAIN NEWS HEADLINES
August 24 – August 31, 2006 Edition
Barnes & Noble
For Options Inquiry NEW YORK, NY/8/29/2006The U.S. Attorney for the Southern District of New York has subpoenaed Barnes & Noble Inc. to inquire into its stock option practices. The company, which has also been under informal investigation by the Securities and Exchange Commission since July, said in a regulatory filing with the SEC that it will fully cooperate with the inquiry.
Last month, B&N launched its own internal review of its stock-options granting program after Timothy Hill, a shareholder, filed a lawsuit claiming wrongful stock-options granting practices.
The SEC and the Justice Department are investigating some 70 or 80 companies to find whether the organizations have manipulated the exercise of stock options by employees. The companies are under scrutiny for possibly having backdated the dates options were granted to a low point for each companys stock price, making stocks less expensive to buy. The stockholders then can sell their shares at higher market prices for a fat profit. If a company discloses the backdating to shareholders and the board approves, then the move is legal. But in some cases companies may have violated government accounting and tax laws.
Len Riggio, founder and CEO of Barnes & Noble Inc. and one of the most feared men in bookselling, and his brother Steve Riggio, creator of Barnesandnoble.com, are major shareholders in Barnes & Noble, Inc.
Steve Riggio has boasted in Wired and other media that barnesandnoble.com would “dominate the online book business.” However, according to Wired, Amazon.com has mopped the floor with barnesandnoble.com. Amazon currently sells 75 percent of all books bought online; barnesandnoble.com, a pathetic 15 percent.
Barnes & Noble, Inc. is the largest bookseller in the world.