The revisions made it appear that the options had been granted earlier than they had, prosecutors said.
While Argo has said the backdating wasn't her idea, it has never been made clear whether the cover-up was her inspiration or someone else's.
Backdating options is not illegal by itself; not disclosing the action to investors or accounting for it is. By not reporting the true cost of option awards, a company understates its expenses - and makes its profits look larger than they really are.
That's where the crime was committed, then repeated, as Argo kept changing option dates for herself and colleagues, hiding her actions all the while. She "fell into a pattern," her attorney said, driven by a desire to attract and retain talented employees.
Awarding options with dates associated with dips in the stock price meant she could ensure better rewards for her colleagues. And hiding the changes meant the company didn't have to take a hit to its expenses. Nobody gets hurt, right?
But it was a crime. As a former auditor at a major accounting firm, Argo could hardly claim ignorance. Nor did she try to.
Big promotion
Argo became the second face of SafeNet, touring the country at Caputo's side to talk to investors.
In 2004, she was promoted to president and chief operating officer, a new position for the company. SafeNet's clients included Bank of America, Samsung, Cisco, the Departments of Defense and Homeland Security and the Internal Revenue Service.
Meanwhile, the push for corporate reform was gaining momentum in the wake of accounting fraud at places like WorldCom Inc. and Enron Corp. Many businesses were pulling back on their stock option issuance, but SafeNet continued to consider them a tool to attract talent. The company couldn't afford the huge salaries and pensions of its larger competitors.
"A lot of people say people don't value options that much. Well, that's absolutely not the case here at SafeNet," Argo told The Daily Record in April 2004.
A month later, she first exercised some of the backdated Oct. 1, 2001, stock options, acquiring 8,500 shares for $5.85 apiece. She could have sold the shares that day for a profit of nearly $139,000. Instead, Argo held on to the stock - richer only on paper.
Around that time, a study about stock option pricing was making the rounds in academic circles.
