The SEC stated: "This action involves improper stock option backdating at Quest Software, Inc. ("Quest"), which resulted in the issuance of financial statements that misstated stock-based compensation expenses by over $100 million. Between December 1999 and August 2002, Quest regularly backdated employee stock option grants to obtain low exercise prices without recording compensation expenses, which allowed it to report materially inflated income or understated losses. The fraudulent scheme, facilitated by Quest's most senior executives, involved options to acquire approximately 11 million shares of common stock spread over 28 separate grants, resulting in a $113.6 million restatement of operating income for the fiscal periods 1999 through 2005."

The SEC stated that: "[It] filed a complaint in the United States District Court for the Central District of California against Quest Software, Inc., an Aliso Viejo, California-based software manufacturer, and three current or former officers: Vincent C. Smith, John J. Laskey, and Kevin E. Brooks."

On April 1, 2009, the Court issued a final judgment against Quest Software, Inc., stating: "Defendant Quest Software, Inc. . . . consented to the Court's jurisdiction over Quest and the subject matter of this action, consented to entry of this Final Judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction), waived findings of fact and conclusions of law, and waived any right to appeal from this Final Judgment."