updated 6/12/2006 2:38:43 PM ET 2006-06-12T18:38:43

The parent of job search site Monster.com was subpoenaed on Monday by the U.S. attorney for the Southern District of New York over the timing of stock options grants to executives.

Earlier in the day, Monster Worldwide Inc. had announced it opened an internal investigation of all its stock option grants. The company often granted options dated before steep rises in its share price, a report published on Monday said.

Monster Worldwide said it has retained outside legal counsel for the investigation that will be conducted by a committee of independent directors. The statement came after The Wall Street Journal reported Monday on possible backdating of stock options at the company.

Monster Worldwide shares fell $3.15, or nearly 7.5 percent, to $38.85 in afternoon trading on the Nasdaq Stock Market. The shares are down more than a third from their 52-week high of $59.99.

Monster become the latest on a growing list of companies whose stock options awards practices have attracted attention. Late last week, two other companies said they had launched similar internal inquiries. Apollo Group Inc., a for-profit education company, and Michaels Stores Inc., a crafts retailer, said its boards were reviewing past grants.

The Securities and Exchange Commission or federal prosecutors are examining such practices at more than 30 publicly traded companies to see if stock options were backdated to boost top executives’ compensation. Executives at several companies have been fired.

The Journal said Monday that one ex-executive at Monster, James Treacy, received seven separate options grants between 1997 and 2001. Three of the grants were dated on days that had the lowest closing price of the quarter and, in one case, the lowest price of the entire year. The Journal said its analysis showed the odds were about one in nine million that a pattern of grants as favorable or more favorable than Treacy’s would have occurred if the dates were selected randomly without regard to stock price.

The founder and chief executive of Monster, Andrew McKelvey, told the newspaper that after drawing up a list of managers to receive the grants and sending it to the compensation committee, “I didn’t know what the mechanics were.” He also said that as the top executive he was “completely responsible” for the options grants. McKelvey told the newspaper he has not received any options.

Monster said its option grants were used to attract and retain employees and recognize individual performance.

Stock options offer the right to buy shares at a price set on the day of the grant. Exercising the shares after a rise in the price following the grant would result in a profit for the holder.

In 2006, Monster Worldwide said it began providing performance-based incentives to senior leadership through a restricted stock unit program rather than through stock options.

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