FirstAm Reports Stock Option Errors

The First American Corp., a Santa Ana, Calif.-based provider of title, mortgage, and other business information, has announced that an Audit Committee panel found that it used incorrect measurement dates in its financial reporting for a number of stock option grants from 1996 to 2006.The special subcommittee also found that First American mispriced options under Statement of Financial Accounting Standards No. 123, the company said. The cumulative impact to the company's financial results over the 1996-2006 period totals approximately $35.7 million, the majority of which is noncash in nature, First American reported. "The special committee determined that these errors were the result of date selection methods, internal control deficiencies, and the misapplication of technical accounting provisions," and not the result of fraud or intent to misstate financial statements, the company said. First American said it believes the errors are immaterial to prior reporting periods, but would be material if corrected in the current year. Therefore, it will restate its financial statements for the years 2001 through 2005, for each quarter of 2005, and for the first quarter of 2006. The company can be found online at http://www.firstam.com.