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Novell's Nasdaq Headaches

By Steven Vaughan-Nichols  |  Posted 2006-09-21 Print this article Print

Novell faces the possibility of Nasdaq delisting due to a delay in filing its last 10-Q, caused by the company's ongoing stock option audit. (Linux-Watch)

When it rains, it pours.

Novell announced on Sept. 20 that it had received a staff determination notice from the Nasdaq Stock Market stating that the Linux common stock is in danger of being delisted from the market.

Nasdaq is threatening this action because the company was late in filing its quarterly Form 10-Q with the Securities and Exchanges Commission for the period ending July 31 2006. By Nasdaq rules, if these reports aren't filed on time, the Market has to consider delisting the stock.

Novell had said on Sept. 11 that it would be late for its 10-Q, stating that it was conducting a voluntary audit of its historical stock-based compensation practices.

Novell has lots of company. Over one hundred businesses have announced that they are involved in either internal or SEC investigations related to their past options granting practices.

The scandal behind all these audits is that, starting this summer, corporate executives started being accused of backdating the dates of stock-option grants for their own profit at the cost of the other shareholders.

While no one is accusing Novell's executives, or many of the other companies engaged in this accounting exercise, of doing this, many technology companies are double-checking their option-granting records.

Read the full story on Linux-Watch: Novell's Nasdaq Headaches

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Steven J. Vaughan-Nichols is editor of eWEEK.com's Linux & Open Source Center and Ziff Davis Channel Zone. Prior to becoming a technology journalist, Vaughan-Nichols worked at NASA and the Department of Defense on numerous major technological projects. Since then, he's focused on covering the technology and business issues that make a real difference to the people in the industry.
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