NEW YORK, June 30, 2008 (PRIME NEWSWIRE) -- Bronstein, Gewirtz & Grossman, LLC has commenced an investigation of MRV Communications, Inc. ("MRVC" or the "Company") (Nasdaq:MRVC) concerning the Company's historical stock option practices and related accounting.
On June 6, 2008, MRVC announced that as a result of recent discovery by management of information relating to stock option practices during the period from 2002 through first quarter 2004, the Company has established a special committee to review the historical stock option practices and related accounting. The information related to the stock option granting practices of 2002 to 2004 was unraveled in the course of reviewing transactions relating to two of MRVC's European subsidiaries, Turnkey Communications in Switzerland and EDSLan Spa in Italy. However, the stock option grants in question are not limited to these two subsidiaries.
Management's preliminary analysis is that, pursuant to the requirements of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) that was in effect during the periods under review, the actual accounting measurement dates for certain stock option grants from 2002 to the first quarter of 2004 differed from the stated dates of grant previously used in accounting for such grants. The differences in these measurement dates result in non-cash, stock-based compensation charges that were not recorded in the Company's financial statements during the applicable periods. The compensation expense is charged to results of operations over the vesting period which is generally four years. Accordingly, the grants during this period would impact the financial statements for the period from 2002 to 2008. These charges have the effect of increasing reported losses and decreasing retained earnings from amounts reported in the Company's historical financial statements.
Based on the information provided by Management, MRVC's board determined that financial statements and the related reports of MRVC's independent public accountants, earning press releases, and similar communications previously issued by MRVC should not be relied upon as MRVC expects to restate its financial statements for the impacted periods.
If you were a shareholder of MRVC between the dates of June 6, 2003 through June 6, 2008 and have information relevant to our investigation or if you would like to discuss potential legal remedies, please contact either Peretz Bronstein or Eitan Kimelman of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484 or via email at eitan@bgandg.com. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.