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Lie Assists In Analysis

Over the past two months, questions about the timing of executive options have rocked more than a dozen companies, leading to probes by board committees, securities regulators and federal prosecutors. Ten executives or directors at these companies have left their posts in recent weeks. Some 17 companies were spotlighted in a report issued last week by the Center for Financial Research and Analysis that found a high risk of "having backdated options." Now a fresh statistical examination by the Journal has turned up five additional companies with highly improbable patterns of options grants, similar to those of some companies already facing scrutiny from federal authorities. The methodology used by the Journal to detect highly improbable grant patterns was reviewed by David Yermack, an associate professor of finance at New York University's Stern School of Business, and by ERIK LIE, an associate professor of finance at the University of Iowa. Both scholars have studied options timing.

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