Guilty verdict for former KB Home chief
29 April 2010
Bruce Karatz, the former CEO of US house builder KB Home has been found guilty of various offences, including mail fraud and making false financial statements. He was however acquitted of securities fraud - charges that related to the backdating of stock options.
Out of a total of 20 charges made against him, Mr Karatz was found guilty of just four by the District court in Los Angeles. However, these guilty verdicts carry a maximum penalty of 80 years in prison.
Mr Karatz's lawyers say they will appeal the verdict, and have asked for a fresh trial.
Despite the guilty verdicts, the failure to convict on the backdating charges is a blow for the US government. It had been seeking to crack down on the practice, whereby executives receiving stock options can select a recent low point in the stock market to buy them, maximising their profits. The practice itself is not illegal, but failure to properly disclose it is.