The former chairman and chief executive of giant homebuilder KB Home pleaded not guilty Monday in a stock options backdating case that authorities say bilked shareholders of millions of dollars.
Bruce E. Karatz, 63, is charged with 19 counts, including mail, wire and securities fraud and making false statements in reports to the Securities and Exchange Commission. Karatz could face up to 415 years in prison if convicted of all the charges, prosecutors said.
Forbes magazine listed Karatz as the nation's fourth-best-paid chief executive _ earning $135.5 million _ in the fiscal year that ended in 2006. He was forced to step down in 2006 after KB discovered he benefited from favorably dated option awards between 1998 and 2005. He agreed to repay the company $13 million.
Karatz agreed to pay another $7.2 million in September to settle civil charges of backdating stock options.
Under terms of the settlement, he didn't admit or deny allegations brought by the SEC, which claimed he profited by more than $6 million from exercising many of his stock options.