Judge OKs Monster Founder Lawsuit

In an order Wednesday, U.S. District Judge Jed S. Rakoff in Manhattan denied a motion by McKelvey, the company's former CEO, to dismiss an amended complaint against him for failure to state a claim.

"For reasons that will be explained in a subsequent memorandum that will issue in due course, that motion is denied," the judge said in the one-paragraph order.

Monster Worldwide is the New York-based parent company of online job search Web site Monster.com.

The lawsuit names the company, McKelvey and Myron F. Olesnyckyj, Monster's former general counsel, as defendants.

"We are obviously disappointed in the outcome," said Andrew C. DeVore, McKelvey's lawyer. "We look forward to seeing the judge's reasons and we'll decide where to go from there."

McKelvey, who left the company in 2006, asked the court to dismiss the lawsuit earlier this year, saying it lacked specific allegations about his role in purported backdating of stock options at the company and his knowledge of the accounting and disclosure implications of the alleged backdating.

In February, Olesnyckyj pleaded guilty to conspiracy and securities fraud in connection with a stock-options backdating scheme at the company.

Monster last year restated its results for 1997 through 2005 by a cumulative pretax amount of $339.5 million to record additional noncash charges for option-related compensation expense.