News & Events

Lie Backdating Study Cited

At least 20 publicly traded companies have confirmed that they are under scrutiny by the Securities and Exchange Commission or state U.S. attorneys offices for backdating stock options, which is a technical way to shovel obscene amounts of money at the boss without being detected. A study by ERIK LIE, associate professor of finance at the University of Iowa, and the Wall Street Journal sparked the SEC's interest in backdating. The study found numerous instances of companies that awarded their executives stock options that were dated at or near the stock's lowest point, guaranteeing a sizable payoff for the holder. If the option was intentionally backdated, it's not an option: It's an outright gift. Lie believes that as much as 10 percent of corporate stock options granted in the past several years were backdated. The article also appeared June 9 on the website of the ROBERTSON COUNTY TIMES in Tennessee.

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