KB Home, the fifth-largest U.S. homebuilder, is the latest subject of an official SEC probe into the company's backdating of stock-option grants. The company disclosed in a SEC filing this morning that, "In August 2006, the Company announced that it had received an informal inquiry from the Securities and Exchange Commission relating to its stock option granting practices. On January 19, 2007, the Company was informed that the SEC is now conducting a formal investigation in this matter. The Company has cooperated with the SEC regarding this matter and intends to continue to do so." KB Home started reviewing options granted to former chief executive Bruce Karatz in 1999 this August; Karatz resigned as CEO in November, and agreed to repay $13 million to cover ill-received gains.
• Sources: SEC 8k Filing, MarketWatch, Bloomberg
• Related commentary: Options Backdating News: KB Home and Home Depot, Homebuilder CEOs Talking Down The Markets, Wall Street Journal's Options Scandal Scorecard (Jan. 20)
• Potentially impacted stocks and ETFs: KB Home (KBH)
Seeking Alpha's news summaries are combined into a pre-market briefing called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only a few seconds to sign up.