SEC alerts companies sooner when probes completed

By Rachelle Younglai

WASHINGTON, Nov 9 (Reuters) - The U.S. Securities and Exchange Commission is closing out some of its stock options backdating cases and alerting companies when the agency completes investigations.

Under a new policy that was put in place about six months ago, the SEC tells the individuals and companies it is investigating once agency lawyers decide against recommending charges.

Previously, companies and individuals had to ask for a letter, which was not always provided because the SEC had to take administrative steps to close out a file.

"Now, at the earliest opportunity we provide such communications even if people don't ask," Walter Ricciardi, the SEC's deputy director of enforcement, told Reuters in an interview this week.

"Staff is encouraged to close an investigation at the earliest point when it becomes apparent that no enforcement action will be recommended."

Recently, companies such as Nvidia Corp (NVDA.O) and PMC-Sierra Inc (PMCS.O) said they received such letters from the SEC.

During the past two years, more than 180 companies have been investigated by the SEC or have conducted their own internal inquiries into possible manipulation of stock option grant dates.

So far, the SEC has brought civil enforcement actions against seven companies, plus 26 former executives associated with 15 companies.

One of SEC's highest-profile cases accuses Apple Inc's (AAPL.O) former general counsel of backdating more than $20 million in stock options in 2001 for Apple executives. Apple Chief Executive Steve Jobs was subpoenaed by the SEC to give a deposition in the case.

Apple has said that an internal review found two questionable grants of options to Jobs, but found no wrongdoing by current management, including Jobs.

Ricciardi declined to speak about any specific case.

"We are still in the midst of a number of the options backdating investigations," said Ricciardi. "But we are trying to move as efficiently as we can."

The options backdating investigation is the focus of one of four internal working groups the SEC formed to tap expertise and coordinate efforts across the agency.

The enforcement division also has a new computer system starting that tracks investigations more closely and a new practice of having senior enforcers involved in closer coordination of investigations.

"I think it enables us to more efficiently put more resources where they are most needed," Ricciardi said. "I think it is having an impact in terms of having an earlier resolution of some of our investigations." (Reporting by Rachelle Younglai; Editing by Tim Dobbyn)