Is Options Gate a McCarthy Era for Business Ethics?
Has Silicon Alley entered the McCarthy era for business ethics? A widening federal investigation into suspicious stock options allocations at least 57 companies, including 25 based in Silicon Valley is "rattling corporate boardrooms, entrepreneurs and rank-and-file workers alike," according to the San Jose Mercury News
Red Herring reports that "Investors are hammering the stocks of many of the companies affected by the inquiries and are asking questions about how well these companies have been governed."
The rush to judgment is "a shame" Michael Gray, a certified public accountant, wrote in a newsletter. "We may be killing the goose that laid the golden eggs."
Venky Ganesan, a venture capitalist who sits on the board of nine start-ups, said. "`Now, you're guilty until proven innocent. Guilty by association. Guilty by implication.''
Options, which have made millionaires out of many geeks over the years, is the way technology companies lure top talent to take a lower paycheck until they can share the company's success.
A PDF of companies under investigation is here
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