The company also said the SEC will not be delving any further into a Playboy interview, published shortly before the August offering, in which Google’s founders played up the company’s prospects.
The settlement relates to about $80 million worth of stock options that were given to employees and shareholders between 2002 and 2004. The company did not register them with the SEC, as it later discovered it was required to by law.
By issuing the options without registering the offering and without the legally required disclosures, Google violated the securities registration provisions of Section 5 of the Securities Act, the SEC wrote.
Google and general counsel David Drummond offered to agree to a cease-and-desist order preventing further breaches of the securities rules in question. The SEC agreed to the order, and did not ask for a cash settlement.
The Section 5 rule in question obliges companies to register options if they amount to more than $5 million in one 12-month period. The company said Drummond believed the options in question were exempt.
Last August, shortly before the IPO was executed, the company made a recission offer, an attempt to buy back the shares in question for a 7% premium.
This was a technicality, designed to limit the company’s liability, if any. The shares, which have almost doubled in price since the IPO, were believed to be much more valuable, and the recission offer was declined by sensible option holders.
Google also said that it has settled related charges with the California Corporations Commissioner. Again, a cease and desist order has been agreed to. In neither case does Google admit or deny guilt.
The SEC said it would not pursue an investigation relating to the Playboy interview, which was published during the company’s pre-IPO quiet period. It had forced Google to attach the interview to its IPO documents.
