Costco Wholesale Corp. Served with Grand Jury Subpoena in Latest Backdating Probe

ISSAQUAH, WA — (MARKET WIRE) — 03/16/07 — Costco Wholesale Corporation (“Costco”)(NASDAQ: COST) (“the Company”) released the following statement:

On March 15, 2007, the Company was served with a grand jury subpoena from the United States Attorney’s Office in the Western District of Washington. The subpoena seeks documents and information relating to the granting of stock options. The Company will cooperate fully with the inquiry. As the Company has previously reported, its Board of Directors appointed a special committee consisting of independent directors Daniel J. Evans, William H.Gates, and Charles T. Munger to review its historical stock option grantpractices in order to determine if the stated grant dates were supported bythe Company’s books and records. While the special committee’s review of the Company’s stock option grant practices from 1996 to 2005 concluded that it was impossible to determine with precision the appropriate measurement date for certain grants for financial accounting purposes, the special committee determined that there was no evidence of fraud, falsification ofrecords, concealment of actions or documentation, or intentional deviation from generally accepted accounting principles. The Company remains confident in the findings of the special committee.

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One Response

  1. it is strange that the Costco CEO’s could email each other at 2am when stock market
    was closed and took out millions from the stock and dropped the price of the shares
    by more than half,,,,,,all of us workers that had company stock lost more than half
    of our 401 retirement savings that seems to me to be insider trading.
    the CEO’s did the selling and trading before the stock market opened.
    that needs to be investigaed

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