EDEN PRAIRIE, Minn. (AFX) - The Securities and Exchange Commission has asked Internet marketer Digital River Inc. for documents about the stock options it gave its executives over the past eight years, the company said.
The Eden Prairie-based company, which has been accused in two lawsuits of backdating its stock options, made the disclosure in an SEC filing Friday after the market closed.
The SEC is 'requesting the voluntary production of documents related to the company's stock-option granting practices' from 1998 to the present, Digital River said in its filing. The SEC letter did not indicate that there had been a violation of federal securities laws, the filing said.
Digital River also disclosed that a committee of outside directors was conducting an internal review of the company's option-granting practices. The company declined to comment further.
Digital River and more than 120 companies have come under scrutiny for the timing of stock-option grants, which have been used as compensation for executives. Several studies and investigations have questioned options awarded at a stock's lowest price in the year.
The two lawsuits filed against the company claim it was unlikely Digital River consistently managed to grant options at historic low points for its stock, which produced substantial profits for the executives when the stock price rose later.
Attorneys in one of the lawsuits asked a judge Friday to dismiss their case. Minneapolis lawyer Vernon Vander Weide declined to comment about why the lawsuit was being withdrawn.
Digital River's stock closed Friday at $56.08, down 27 cents, or 0.5 percent, but rose to $56.14 in after-hours trading.
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