The U.S. Attorney’s Office for the Western District of Washington closed a two-year investigation of Costco Wholesale Corp. that included allegations the company issued backdated stock options to employees, including executives.

The investigation determined that between 1996 and 2003, Costco issued stock options and some of the options were made effective as of a date on which Costco’s stock price was lower than the price on the date when the options were actually granted. As a result, Costco failed to properly account for these stock options on its books and records, including on financial statements filed with the Securities and Exchange Commission. In 2006, Costco self-reported the violation to the SEC.