Friday, March 6, 2009
Former KB Home Exec Indicted In Stock Options Backdating Fraud
Bruce E. Karatz, 63, of Bel Air Estates, California and the former chairman and chief executive officer of KB Home, was indicted yesterday on 20 counts of fraud including mail fraud, wire fraud, securities fraud, and making false statements to the SEC and internal accountants. Karatz is alleged to have engaged in a stock option backdating scheme that reportedly bilked shareholders out of millions of dollars. Karatz agreed to pay $7.2 million to settle civil charges in the case, faces up to 415 years in prison if convicted on all charges in the criminal matter. Last month, former KB executive, Gary A. Ray, pleaded guilty to conspiring with Karatz to obstruct justice.