The option scandals that have hit the tech industry are now heading over the real estate sphere as Bruce Karatz resigned over the illegal options he got from KB Homes.
KB Home, a Los Angeles-based home-construction leviathan once known as Kaufman & Broad, said Mr. Karatz would immediately leave his posts as president, CEO and chairman. He will forfeit about $13 million in gains from the back-dating.
Also departing is Richard B. Hirst, executive vice president and chief legal officer, and Gary A. Ray, the head of human resources. Mr. Hirst resigned and Mr. Ray was terminated, the company said. A person familiar with the investigation said both Mr. Karatz and Mr. Hirst cooperated with the internal investigation.
Messrs. Karatz, Hirst and Ray couldn’t be reached for comment.
Mr. Karatz is one of the highest profile casualties of the stock-options scandal, which has now claimed the jobs of more than 50 executives and directors, including William McGuire, the chief executive of UnitedHealth Group Inc. More than 130 companies, including KB Home, are under federal investigation in a wide government action. Five former executives at the companies have been charged with criminal wrongdoing. via WSJ.com.
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We purchased a new KB Home and feel like the warranty is useless. Our experience is that these guys lie and play games to try and get out of covering issues of any significance under warranty. Then when they do they'll try and get it done on the cheap or try and make the original contractor come back for free and make things worse. Our experience is that these guys are pretty unethical.