Google Inc. may have illegally issued more than 23 million shares of its stock to hundreds of employees and consultants, injecting an unexpected legal risk into the online search engine leader's highly anticipated IPO. The Mountain View-based company disclosed the possible violations Wednesday in a prospectus offering to buy back the affected shares and outstanding stock options for a total of $25.9 million, including interest payments.
With $549 million in cash as of June 30, Google can easily afford to make amends. But it's uncertain whether the gesture will satisfy everyone affected by potential bureaucratic blunders that occurred from September 2001 through June 2004. During that time, the company says it neglected to register 23.2 million shares of common stock and 5.6 million outstanding stock options with securities regulators. The oversights might have broken federal and state laws, according to Wednesday's filing. The affected common stock is owned by 1,105 current and former employees, as well as company consultants.
News source: Yahoo! News