Google cleared over Playboy interview
14 January 2005
Search giant Google has announced that US regulators have decided not to pursue an investigation into whether its founders violated disclosure rules by talking to Playboy magazine.
Larry Page and Sergey Brin spoke to the magazine ahead of the company's initial share sale.
Accepting a cease-and-desist order from the Securities and Exchange Commission, Google an SEC complaint brought against a company for not registering employee stock options without financial penalty.
The commission's administrative complaint charged Google and its general counsel, David C Drummond, with failure to register more than $80 million worth of stock options awarded to employees prior to the company's initial public offering (IPO) in August.
Investigators found Google violated a requirement that companies issuing more than $5 million worth of options in a 12-month period either register the options with the SEC or disclose financial data and risks to the employees.
"They were taking a risk that their investments would be worth something in the future, but Google never disclosed that risk," said Xavier Carlos Vasquez, an SEC staff attorney in San Francisco. "We want to send a message to assure companies know they must do that."
SEC inquiries into the stock options and the Playboy interviews contributed to a delay in Google's offering last summer.
Google has not admitted or denied guilt in either matter and has agreed with the SEC to avoid future violations.
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