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Lie's Research Cited

In a game where timing is everything, some corporate executives appear to have found a sneaky way to manipulate it. And ERIK LIE, an associate professor at the Henry B. Tippie College of Business at the University of Iowa, has caught them. Lie's study of executive stock-option awards turned up some suspicious patterns and gave rise to a federal investigation into the practice known as backdating. His analysis, published in May 2005 with a follow-up study forthcoming, shows a pronounced, repeated pattern of executives buying options when the stock is priced at its lowest. By doing so, they make a greater profit when they decide to sell - often on the order of millions of dollars.

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