Robert P. Cummins today confirmed, as reported in Cyberonics' (NASDAQ: CYBX) recently filed Form 10-Q… for the quarter ended October 29, 2010 that he had received a closure letter from the Staff of the U.S. Securities and Exchange Commission (SEC) stating that it had completed its investigation of Cyberonics, Inc.'s stock option practices commenced on June 9, 2006 and that it does not intend to recommend any enforcement action against Mr. Cummins.
The letter comes more than four years after SunTrust Capital Markets, a unit of SunTrust Banks Inc., published two analyst reports in June 2006 and made numerous statements to the public and press regarding options granted to Mr. Cummins two years earlier in June 2004. SunTrust's allegations regarding Mr. Cummins' June 15, 2004 option grant were widely reported in the mainstream media including but not limited to The New York Times and Houston Chronicle.
Contrary to SunTrust's widely disseminated reports and statements, Mr. Cummins' June 2004 option grant was unanimously approved by the Cyberonics' Board of Directors in lieu of a cash bonus or restricted stock, without Mr. Cummins' participation. The award was properly approved and priced according to the terms of the shareholder-approved option plan on file with the SEC, properly disclosed to the public within two days of the award and properly accounted for. The award vested over a period of 60 months and was never exercised or sold by Mr. Cummins.
Mr. Cummins commented, "This is my first opportunity to speak publicly about the devastating personal and professional purgatory in which my family and I have been living since SunTrust published their reports. I resigned as Chairman and CEO of Cyberonics in November 2006 at the request of the Board, not because of any options related issues, but because SunTrust's well-publicized reports and statements over the prior five months completely destroyed my credibility with the constituencies whose support I needed at a critical time to successfully accomplish Cyberonics' mission of improving the lives of people touched by treatment resistant depression. The SEC closure letter is a positive, but it does little to rebuild my reputation, career and opportunity to make a difference in lives of people touched by treatment resistant illnesses."
…Cyberonics 10-Q: http://www.sec.gov/Archives/edgar/data/864683/000086468310000026/form10.htm (http://www.sec.gov/Archives/edgar/data/864683/000086468310000026/form10.htm)