Acquittal in McAfee backdating trial

A jury on Friday acquitted the former top lawyer at computer-security software maker McAfee Inc. of illegally tampering with his stock option grants to boost his pay package.

Kent Roberts, who served as McAfee’s general counsel until he was fired in 2006, was charged with two counts of fraud and one count of falsifying accounting books. A jury on Friday found him not guilty on the fraud charges and couldn’t come to a decision on the third charge.

Roberts was charged with illegally altering the price of 20,000 shares of stock options he was awarded in 2000 when the company was called Network Associates Inc. The change increased the value of the stock by nearly $200,000, but Roberts didn’t sell the shares.

Federal prosecutors must now decide whether to retry Roberts on the false accounting charge. Assistant U.S. Atty. Laurel Beeler declined to comment after the verdict was read.

“I would strongly recommend against pursuing this any further,” U.S. District Judge Marilyn Hall Patel said after dismissing the jury, which deliberated for nearly three days after a two-week trial. “With no actual loss of money it’s a little hard spending all the time and effort on this.”

Roberts declined to comment and his lawyer, Stephen Neal, said only that they “were pleased with the verdict.”

Roberts was only the third executive to go on trial over alleged illegal backdating of stock option awards and the first to be acquitted.

Former Brocade Communications Systems Inc. Chief Executive Gregory Reyes and the networking-equipment company’s former personnel chief, Stephanie Jensen, were convicted last year after trials in San Francisco federal court. Both are appealing.

The scandal over improper options-related accounting led to investigations at hundreds of companies and criminal charges against 21 people, including executives at Broadcom Corp., Monster Worldwide Inc. and Take-Two Interactive Software Inc.

Eight of those executives have pleaded guilty.