Culture Clash

Every country has incidents like these. But, to have the exact same fraud in so many companies, it just seems so... ubiquitous.

ICHRON YAACOV, Israel — The list of Israeli technology companies facing allegations that they timed or backdated managers' stock option awards to coincide with low share prices has ballooned in recent days. Comverse Technologies, Zoran Corp. and DSP Group have joined Mercury Interactive Corp., whose troubles began six months ago.

Mercury, an enterprise-software optimization company, accepted the resignations of CEO Amnon Landan, CFO Doug Smith and general counsel Susan Skaer last year when it was revealed that the date of stock option grants given to Landan and other executives had been retroactively amended to dates on which the share price had been low.

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In Israel, the local high-tech industry has always been perceived as a glittering, squeaky-clean sector where the leading companies were terrific at creating new inventions with the help of their mastermind engineers, genius physicists and absentminded mathematicians," said Guy Rolink, high-tech analyst for The Marker. "But the truth is that many of the high-tech managers, mainly at the blue-chip companies, have become masters of financial engineering."

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