On Thursday, two former executives of Vitesse Semiconductor Corp pleaded guilty to a minor charge. Former Chief Executive Louis Tomasetta and former Executive Vice President Eugene Hovanec were earlier accused of inflating the earnings of the corporation and backdating stock options.
Tomasetta and Hovanec admitted to modifying Vitesse's records to obstruct a contemplated probe by the US Securities and Exchange Commission (SEC). In 2010, both of the former executives were indicted for charges on securities fraud and creating false statements to auditors.
The case started due to a scandal in 2005 that alleged several corporations and their executives manipulated stock option dates. The scandal led to various civil and criminal cases filed by the US enforcement agencies.
In 2007, Vitesse and Tomasetta and Hovanec's insurers agreed to pay USD10.2 million. The money was used to settle several shareholder lawsuits about backdating and accounting manipulation accusations. After three years, Vitesse agreed again to pay USD3 million to settle with the US SEC.
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