Lie Study Shows More Than 2,200 Companies Backdated
Bookmark & ShareAugust 3, 2006
U.S. companies, buffeted by five years of financial scandals, are under scrutiny by prosecutors again, this time over stock-option grants. To some investors, the latest investigation shows that corporate promises to root out executive wrongdoing failed. Federal investigations, which have ensnared more than 80 companies including UnitedHealth Group Inc. and Home Depot Inc., may involve dozens more, according to U.S. officials, securities lawyers and executive-pay specialists. The probe has turned into the country's biggest investigation of corporate malfeasance since the inquiry of improper mutual-fund trading three years ago led to $4.3 billion in penalties. A July 15 study by Professors Randall Heron of Indiana University and ERIK LIE of the University of Iowa, who were among the first to question backdating, concluded that more than 2,200 companies may have tinkered with option rewards between 1996 and 2005.
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