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A few months ago, McAfee (MFE) announced that it was investigating its option dating practices over a stretch beginning in the 1990’s; it later received an SEC subpoena relating to the matter. Thursday, they announced that the investigation was not completed, but complete enough to warn investors not to rely on its annual financial statements for the fiscal years 2003, 2004, 2005, and the quarterly statements contained in those years plus those issued for the first quarter of 2006.

From the 8-K:

“McAfee believes that it is more likely than not that the amount of such additional adjustments relating to prior periods will be material and that McAfee will restate its financial statements in at least one, and potentially several, prior periods.”

No surprises in that statement; it pretty much fits the pattern of the disclosures about restatements seen so far. And no numbers yet, but there was one other interesting statement in the 8-K:

“… in the event that a restatement of these financial statements is required, it likely will affect financial statements for prior periods.”

Which is a bit of a warning, not a strong one, not to rely on the financials too far back in time. It also leads you to believe that they may be finding problems as far back as 2000, because of the May 30 8-K filed when their general counsel was dismissed. In that disclosure, they mentioned that the investigation had turned up one episode involving an improper grant and the general counsel. So, we have to wait for a fuller story.

MFE 1-yr chart:

MFE 1-yr chart

Source: McAfee Backdating Update: Company to Restate Financials for 2003-2006