Forbes reports that B&N will delay filing its third-quarter report due to an ongoing investigation of stock option granting practices, including its own review of its historical stock option grants with outside legal counsel. In a filing with the Securities and Exchange Commission, Barnes & Noble said it plans to file its report for the quarter ended Oct. 28 “as soon as practicable” once the review is complete.
In August, the company, along with 188 others, received a subpoena from the U.S. Attorney for the Southern District of New York regarding its stock option practices. In July, the SEC launched an informal inquiry into possible backdating of its stock option grants. Backdating refers to a method whereby the vesting price of a stock option is set to a day when the stock traded cheaply, making it more valuable for the executive holding the option. While not necessarily illegal, the method can be problematic if not properly disclosed to investors.