Options backdating

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Options backdating

Awarding employees with stock options those are dated prior to the actual grant date. The date chosen could be one when the company’s stock was at a low, so the options can be in-the-money at the time of granting itself. The practice is illegal if it is not followed by proper disclosure and related expenses are not recorded in financial statements.
References in periodicals archive ?
Many issues facing the industry, such as stock option backdating and SEC clarifications on revenue recognition and lease accounting, posed the risk of restatement.
In its recent charges for option backdating, the SEC charged
It also introduces the stock option backdating scandal of 2006 and 2007 and explains why that episode offers a unique opportunity to investigate this basic corporate law question.
Altschuler has successfully litigated cases relating to multi-billion dollar buyouts, investment stakes, tender offers and contests for corporate control, breach of fiduciary duty, financial and accounting fraud, insider trading, requests for company books and records, stock option backdating, as well as many of the largest corporate bankruptcies in history.
Option backdating possesses two basic features of accounting fraud - incentive and opportunity.
In other words, newly granted options induce CEOs to engage in either option backdating or downwards earnings management.
We recently announced a settlement of litigation over stock option backdating that had cost the company hundreds of millions of dollars.
First, unlike prior studies, we investigate the role of compensation committees in option backdating.
Enron Corporation, Parmalat SpA, Larry Ellison, stock option backdating, earnings management, Guam (I testified at a trial there for six weeks).
Byrd, SEC Charges Additional Brocade Executive For Role in Stock Option Backdating Scheme.
The origin of the subprime crisis immediately makes the resulting litigation different from prior waves of litigation, such as IPO laddering and stock option backdating litigation--both of which allegedly originated with distinct and repeated acts of corporate or individual misconduct.
LexisNexis unit Mealey's (New York) has released "Mealey's Litigation Update: Stock Option Backdating," an executive summary that includes a collection of 57 case summaries and litigation updates reporting on complaints, motions, briefs, other pleadings, settlements and rulings involving stock options backdating litigation.