usdoj.gov | 12/15/08 | suspect: Gary A. Ray | victim: KB Home
A former Vice-President and head of Human Resources at KB Home ("KB") has agreed to plead guilty to a conspiracy in 2006 to obstruct justice in connection with an internal investigation into stock option backdating at KB.
In a plea agreement and one-count information filed today in United States District Court in Los Angeles, Gary A. Ray, 50, of Pacific Palisades, agreed to plead guilty to conspiring with the CEO of KB in spring 2006 to impede and obstruct a contemplated investigation by the Securities and Exchange Commission ("SEC") into stock option backdating at KB.
Ray has admitted that he and the CEO agreed that they would collaborate in causing KB's general counsel to prepare and to submit a false and misleading report on KB's historical option granting practices to KB's Audit Committee and other KB managers, who relied on the false report in making disclosure decisions with respect to required SEC filings.
Pursuant to the terms of the plea agreement signed by Ray and filed today, Ray is subject to a statutory maximum sentence of five years of imprisonment.
Ray has also agreed to cooperate with the government in its continuing investigation of stock option backdating at KB.
