cheap single parent dating - Backdating of stock option grants

The cascading litany of alleged charges is not likely to stop with the Brocade case.Indeed, with more than 80 companies being reviewed by the SEC for potential illegal backdating practices, and one academic study claiming that more than 2,000 companies have engaged in the practice, civil and criminal charges will probably mushroom in the next few months. The purpose of backdating is straightforward: it gives options holders an immediate paper gain, and a real gain once the option is exercised.We interpret these findings as evidence that most of the abnormal return pattern around option grants is attributable to backdating of option grant dates.

backdating of stock option grants-62

If you have a coupon to buy a Ferrari for $110,000, and the market price of the car is $120,000, your coupon is worth $10,000.

But if you're lucky enough to have a coupon that lets you buy a Ferrari for a mere $50,000, your piece of paper would have a far more handsome market value of $70,000. If an executive is able to change the grant date of an option retroactively--for instance, to when the stock was trading at a lower price--the options become more lucrative. Stock options by themselves are not problematic or controversial. One method academics have used to measure the pervasiveness of backdating is to review stock option grants to executives to see if an unusual number are clustered around dates when the stock is trading at a low value.

Already, some companies have begun restating years worth of financial results.

To try to answer some questions about what's going on, CNET has compiled the following list of frequently asked questions. Backdating, which refers to the practice of altering the dates of grants, is a way for employees of a company to make additional money from stock options.

Last week, federal investigators announced criminal charges against former executives of Brocade Communications Systems, and they're hinting that more cases may be on the way.

Meanwhile, Silicon Valley's top lawyers are scrambling to assuage their clients' fears, and the U. Security and Exchange Commission has said that the investigation will expand beyond technology companies to other publicly traded outfits.

While it's not necessarily illegal, in many cases it could be. The Securities and Exchange Commission said last week that at least 80 companies are the subject of a probe.

Also, some companies have independently confirmed that they've been contacted by federal investigators.

What’s more, the Do J asserts that to facilitate the alleged scheme, the Brocade executives falsified documents — including employment offer letters and compensation-committee minutes — to make it appear that the paperwork supported the earlier options-grant dates. Those executives usually wind up being the top five executives.

Tags: , ,