Option Probes Cited for Record Number of Late Filings

The widening options-timing scandal contributed mightily to a record-setting number of large U.S. corporations filing late financial reports for the second quarter, a study released Wednesday said.

Market research firm Glass Lewis & Co. said 138 companies with market capitalizations above $75 million reported in the second week of August that their quarterly reports would be late.

The most-often cited reason for delay was the need to review past option grants, the firm said.

“Companies filed more late filings for the second quarter of 2006 than for any other quarter since we began tracking them during the first quarter of 2004,” said Glass Lewis, based on a review of Securities and Exchange Commission documents.

Federal investigators are combing the records of scores of companies, looking for abusive manipulation of the grant dates and exercise prices of stock options given to executives.

“By our count, 121 companies have disclosed restatements, internal investigations or government investigations in connection with issues relating to the timing of past stock-option grants,” Glass Lewis said.

SEC Public Affairs Director John Nester said the agency had about 80 investigations underway on the options issue. He declined to comment further.

Of the 138 tardy filers counted by Glass Lewis for the second quarter, 48 specifically cited investigations of option grants as the reason, the research firm said.

Among those 48 were Apple Computer Inc., UnitedHealth Group Inc. and Juniper Networks Inc., the firm said.

In 2005’s second quarter, Glass Lewis said there were 91 late filers. The firm said options timing was the cause of most of the 52% jump over the year-earlier period.