NEW YORK, June 30, 2008 (LAWFUEL) — Bronstein, Gewirtz &
Grossman, LLC has commenced an investigation of MRV Communications,
Inc. (“MRVC” or the “Company”) (Nasdaq:MRVC) concerning the Company’s
historical stock option practices and related accounting.
On June 6, 2008, MRVC announced that as a result of recent discovery by
management of information relating to stock option practices during the
period from 2002 through first quarter 2004, the Company has
established a special committee to review the historical stock option
practices and related accounting. The information related to the stock
option granting practices of 2002 to 2004 was unraveled in the course
of reviewing transactions relating to two of MRVC’s European
subsidiaries, Turnkey Communications in Switzerland and EDSLan Spa in
Italy. However, the stock option grants in question are not limited to
these two subsidiaries.
Management’s preliminary analysis is that, pursuant to the requirements
of Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees (APB 25) that was in effect during the periods
under review, the actual accounting measurement dates for certain stock
option grants from 2002 to the first quarter of 2004 differed from the
stated dates of grant previously used in accounting for such grants.
The differences in these measurement dates result in non-cash,
stock-based compensation charges that were not recorded in the
Company’s financial statements during the applicable periods. The
compensation expense is charged to results of operations over the
vesting period which is generally four years. Accordingly, the grants
during this period would impact the financial statements for the period
from 2002 to 2008. These charges have the effect of increasing reported
losses and decreasing retained earnings from amounts reported in the
Company’s historical financial statements.
Based on the information provided by Management, MRVC’s board
determined that financial statements and the related reports of MRVC’s
independent public accountants, earning press releases, and similar
communications previously issued by MRVC should not be relied upon as
MRVC expects to restate its financial statements for the impacted
periods.
If you were a shareholder of MRVC between the dates of June 6, 2003
through June 6, 2008 and have information relevant to our investigation
or if you would like to discuss potential legal remedies, please
contact either Peretz Bronstein or Eitan Kimelman of Bronstein, Gewirtz
& Grossman, LLC at 212-697-6484 or via email at eitan@bgandg.com. Those
who inquire by e-mail are encouraged to include their mailing address
and telephone number.
