Lie Expects To Uncover More 'Backdating'
Bookmark & ShareJuly 12, 2006
The list of companies being investigated in the stock-options saga grows longer by the day and could easily climb much higher, according to the professor whose research brought the issue to light. More than 50 companies are being investigated by the Securities and Exchange Commission and federal prosecutors over whether they "backdated" or otherwise manipulated the dates they granted stock options to employees to make the options more lucrative, according to Reuters. And the number of companies that engaged in the practice could climb into the hundreds once more research is carried out, according to ERIK LIE, an associate professor of finance at the University of Iowa. It was Lie's research that attracted media and regulatory attention to the problem when he published a study in the journal Management Science noting that the granting of options to executives at several companies preceded big run-ups in the stock price. "I am confident that the number of companies who have done this is much higher" than the number currently being investigated, said Lie, who plans to release new research in the coming weeks.
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