Former KB Homes CEO Acquitted on Options Backdating, Found Guilty on Other Charges

LOS ANGELES—A federal jury April 21 acquitted former KB Homes chairman and chief executive officer Bruce Karatz of securities fraud in relation to an options backdating scheme, but found him guilty of lying to accountants and others during the subsequent investigation, the United States Attorney in Los Angeles announced (United States v. Karatz.

The acquittal on the backdating charges marks the second time in a matter of months that the U.S. Attorney’s Office in Los Angeles has failed to win convictions against high-profile corporate defendants for engaging in the practice.

In December 2009, a federal judge dismissed stock ...