The United States Securities and Exchange Commission is investigating Cablevision, the corporation at which the current Chairman of the Board of Trustees worked for over 20 years. The investigation comes as part of a much larger inquiry into numerous companies for the misuse of stock option grants.

Trustee Chairman Robert Lemle, OC ’75, retired from his position as vice-chairman of Cablevision in 2004. The SEC is investigating stock option grants awarded from 1997-2002.

In early August, Cablevision conducted a voluntary self-investigation, which concluded that many grants awarded from 1997 to 2002 carried dates that do not match the dates they were actually granted.

This is significant because of the nature of stock options. Stock options are shares in a company awarded to company employees. These shares can be redeemed for a limited time only. In the case of Cablevision executives, they were only permitted to exercise 1/3 of their options per year, for three years.

The Aug. 9 New York Times defined stock options this way: “A stock option lets the recipient buy stock at a predetermined price, called the grant price, at a later date. The lower the grant price, the larger the profit for the recipient.”

If the date on a stock option is altered to correspond to a time when the value of the stock was lower, people make profit dishonestly. This is called backdating and is what Cablevision is being investigated for.

It is not yet known to whom these improper grants were made, as no names have been mentioned officially. However, according to the New York Times, it is fact that between 1997 and 2002 over 1.9 million stock options grants were awarded to CEO of Cablevision James Dolan and the top four company executives — including Lemle, who was appointed vice-chairman in 2001, after serving as general counsel prior to that date.

In total, Lemle received 567,700 grants during those five years, the highest amount among the top four.

SEC does not yet know and Cablevision would not comment on whether or not any backdating that may have occurred was intentional. The company has hired outside lawyers and set up an external investigation committee to look into the matter further.

Professor of Economics Ken Kuttner commented on how this investigation may affect the Oberlin community: “While there has been some private discussion, I’m not aware of any expression of outrage or concern among the faculty. Maybe that’s because not many people are aware of the situation…Or maybe it’s just because people are withholding their judgment until the facts come out.”

Lemle restated the purpose of the investigation in this way: “The investigation relates to the granting of stock options to employees of Cablevision, and whether those stock option grants were properly disclosed and accounted for on the books and records of the company.”

He added that he informed the Board of Trustees of the investigation and that the issue has been addressed by its full membership.

Responding to whether or not the investigation was affecting his relationship with the College, Lemle said, “The trustees have just unanimously elected me to chair the presidential search committee at the most recent Board meeting.”

A few other trustees who spoke on background for this article said it was their understanding that many trustees believed the investigation was irrelevant to Lemle’s board involvement, barring any future evidence of culpability.

Others said there was some concern among trustees over whether the investigation could potentially mar the institution’s image as the College searches for a new president.

Vice President for College Relations Al Moran provided a statement regarding the matter: “Mr. Lemle has served Oberlin College with both distinction and honor as a member of the Board of Trustees for more than a decade and as board chair for more than a year.”

With reporting by Emma Dumain