KB Home Inc. disclosed Monday that a lawsuit was filed against it alleging violations of the Employee Retirement Income Security Act, related to option backdating.
The suit filed last month in a California district court alleges the company breached its fiduciary duty to participants in the company’s 401(k) retirement program by issuing backdated option grants, according to a filing with the Securities and Exchange Commission.
KB Home and many other public companies are being investigated by the SEC and other regulators for the alleged practice of backdating, or selecting earlier grant dates in hindsight when the company’s stock was at a low point.
The Los Angeles-based homebuilder announced last year that it had found errors in options granted between 1998 and 2005, and that it will have to restate its past results to record up to $41 million in additional non-cash compensation expense.