The L.A. homebuilder issued a release this afternoon saying that the Department of Justice is looking into KB's past stock options practices but that the company itself is not a target. Earlier, Bloomberg News quoted unnamed sources as saying that KB itself was under criminal investigation. What all this suggests is that the company is desperately trying to distance itself from former CEO Bruce Karatz and former human resources head Gary Ray, who are at the center of the backdating inquiry. KB's internal investigation concluded that only Karatz and Ray were involved in the backdating. Representatives for both men deny they did anything wrong. Be advised, this one will take a while to sort out.
More by Mark Lacter:
American-US Air settlement with DOJ includes small tweak at LAXSocal housing market going nowhere fast
Amazon keeps pushing for faster L.A. delivery
Another rugged quarter for Tribune Co. papers
How does Stanford compete with the big boys?
Those awful infographics that promise to explain and only distort
Best to low-ball today's employment report
Further fallout from airport shootings
Crazy opening for Twitter*
Should Twitter be valued at $18 billion?
Recent stories:
Siri versus Hawaiian pidgin (video)Letter from Down Under: Welcome to the Homogenocene
One last Florida photo
Signs of Saturday: No refund
'I Am Woman,' hear them roar
New at LA Observed
On the Politics Page
Go to Politics
Sign up for daily email from LA Observed