News & Events

Lie Paper Shows More Firms Backdated Options

Broadcom Corp. said it expects to take a charge against earnings going back to 2000 for at least $750 million, in one of the biggest restatements yet in the growing scandal over stock-options practices. Federal authorities are investigating more than 50 companies, including Broadcom, to determine whether options were illegally backdated or otherwise manipulated. The Irvine, Calif., chip maker joins about a dozen companies that are working on restatements because of errant accounting for their option grants to top executives and other employees. ERIK LIE, a University of Iowa business professor whose work helped fuel regulatory inquiries into backdating, is expected to release fresh research this weekend showing anomalies that suggest a huge cohort of companies may have played games with their options grants. In his new research paper, which analyzes options prices and share movements, Dr. Lie estimates that 29 percent of the nearly 8,000 firms studied had backdated or otherwise manipulated grants to top executives at some point between 1996 and 2005.


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