The U.S. Securities and Exchange Commission has launched an inquiry into KB Home’s stock-option grants, the home building company announced.
Staff of the Los Angeles regional office for the SEC on Wednesday notified the company of an “informal inquiry,” KB Home reported.
“KB Home has informed the SEC staff of the status of an internal review being conducted by members of the Audit and Compliance Committee of its board of directors in conjunction with outside legal counsel. The company intends to cooperate fully with the SEC inquiry,” KB Home said in the announcement.
MarketWatch reported that the company is reviewing stock-option grants given to CEO Bruce Karatz, who reportedly received $100 “from cashing out options dated when shares traded at relative lows.”
Three shareholder lawsuits have been filed against the company and certain directors and officers in the past two months, KB Home also announced. “The suits generally allege breach of fiduciary duty in connection with the company’s stock-option grants. The company is evaluating the suits and does not intend to comment on them other than through the filing of responses in accordance with applicable court rules.”
A publicly traded company that is listed on the New York Stock Exchange under the symbol “KBH,” KB Home’s share price closed at $41.18 on Thursday, up 65 cents from its opening price of $40.53 that day, and was trading at $40.69 per share as of 10:21 a.m. ET today after opening at $40.55.
The company has operating divisions in California, Arizona, Nevada, New Mexico, Colorado, Illinois, Indiana, Louisiana, Texas, Florida, Georgia, Maryland, North Carolina, South Carolina and Virginia. Kaufman & Broad S.A., the company’s French subsidiary, is a major home builder in France. The company delivered homes to 37,140 families in the U.S. and France in 2005.
