updated 9/22/2006 5:50:01 PM ET 2006-09-22T21:50:01

In one of the more unusual twists in the current wave of stock options irregularities, cable TV operator Cablevision Systems Corp. said it granted options to an executive after he died.

Cablevision restated its financial results Thursday because of the improper stock options practices and also said it had received a subpoena from the U.S. Attorney’s Office for the Eastern District of New York, which is investigating the company.

In a regulatory filing made Thursday, Cablevision disclosed that it had granted options to an executive after his death, but improperly recorded the date of the grant to an earlier time when the executive was still alive.

Cablevision didn’t identify the executive but The Wall Street Journal, citing people familiar with the situation, said the options were given to Vice Chairman Marc Lustgarten, who died in 1999. The Journal said Lustgarten’s estate was entitled to exercise the options upon his death.

A Cablevision spokeswoman declined to comment beyond what was in the filings.

Paul Hodgson, a senior research associate with The Corporate Library, a corporate governance research firm, said that while the grant of options to the dead executive was “a fairly small offense,” it “may be demonstrative of a wider lack of ethics.”

Cablevision also restated financial results Thursday because of the options practices, with a net impact of reducing earning by $89 million since 1997.

Options give the recipient a chance to buy shares at a specific price and a chance to reap profits if the shares rise before they are redeemed.

Merrill Lynch analyst Jessica Reif Cohen noted that while the investigation from the U.S. Attorney’s office could take “unexpected turns, we have no current basis to believe that it will result in a material change to the company’s financial results or impact the earnings going forward.”

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