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Former KB Home chief Bruce Karatz convicted in stock scheme
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File photo of Bruce Karatz.
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A federal jury in Los Angeles convicted Bruce Karatz, the former chief executive officer of KB Home, of four felony counts stemming from an investigation into alleged stock manipulation. The jury acquitted Karatz on 16 other charges.
The jury found Bruce Karatz guilty of two counts of mail fraud, one count of lying to company accountants and one count of making false statements in reports to the Securities
and Exchange Commission.
Prosecutors had accused Karatz of backdating stock options, or retroactively changing the date a stock option is awarded in order to increase the stock's worth.
"Backdating is not illegal as long as the practice is disclosed, but the prosecutors made the case that KB Home did not make the required disclosures and that’s why they had the case,” said Mark Lacter, a business analyst for KPCC.
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Karatz's attorney said he was disappointed at the convictions and plans to file a motion for a new trial. He'll be sentenced September 8. He faces up to 80 years in prison.
(Audio: KPCC's Alex Cohen spoke with business analyst Mark Lacter)
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