Marvell Technology Group appears to be continuing to coordinate the use of its thumb and nose in the general direction of the government.
While many companies quickly pushed executives overboard when faced with the backdating investigations, Marvell clung to its leaders even against the recommendations of the audit committee. And when it came time to settle the backdating score, the SEC fined the company $10 million and barred COO Weili Dai from being an officer or director for five years, while also fining her $500,000. At the time, SEC San Francisco Chief Marc Fagel scolded Marvell for not cooperating and not cleaning up the backdating problem at the time, and said the company didn’t receive the credit afforded to other companies that did those things.
Now Dai — who co-founded the semiconductor company with her husband Sehat Sutardja — has been made a vice president. Marvell announced in a June 2 regulatory filing that Dai would be taking the new position as vice president of sales for the communications and consumer business.
We’re pretty sure that Marvell doesn’t think the appointment violates the director and officer ban. But we were still curious about what the SEC thought. Unfortunately Fagel wouldn’t comment, but a former SEC San Francisco chief, David Bayless, who’s now with Covington & Burling, gave us some insight on the definition of a director and officer.
“Director’s easy,” Bayless told us. “But an officer — what does that mean?”
Although Rule 3b-2 of the Securities Exchange Act of 1934 defines an “officer” as “a president, vice president, secretary, treasury or principal financial officer, comptroller or principal accounting officer, and any person routinely performing corresponding functions,” Bayless said the application is more of a practical matter — after all some companies are just teeming with VPs ... you know, like Vice President, Vending Machine Operations.(Marvell lists 16 on its payroll, not counting Wai.)
“As a practical matter, both companies and the SEC look at whether the individual is in senior management,” Bayless said. “A lot of it is who does the person report to and who reports to them.”
A call to a Marvell representative was not returned as of posting time.
What do you think? Is it OK that Dai is a VP at her company? Should the SEC be upset?
— Zusha Elinson
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