Bookseller Barnes & Noble Inc. said Tuesday it received a subpoena regarding its stock option practices from the U.S. Attorney for the Southern District of New York.
In a regulatory filing with the Securities and Exchange Commission, the company said it received the subpoena on Aug. 25, and that it intends to fully cooperate in its response.
Barnes & Noble reported in July that the SEC had launched an informal inquiry into its stock option granting practices. Earlier the bookseller said its board of directors had launched its own internal investigation.
Numerous companies are currently investigating whether the exercise price of stock options given to employees was manipulated by changing the grant date to correspond to a low point for the company's stock price in a practice known as backdating. Such a move can fatten profits for options recipients when they sell their shares at higher market prices.
Backdating options can be legal as long as the practice is properly disclosed to investors and approved by the company's board, experts say. However, backdating practices may violate federal accounting and tax laws in some cases. More than 75 companies are under investigation by the Securities and Exchange Commission and/or Justice Department for possible irregularities.
