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Lie: Not All Backdating Can Be Prosecuted

This summer, federal prosecutors and regulators fired two big opening volleys in their crackdown against suspiciously timed grants of stock options to top executives, bringing criminal and civil charges against former officials of two technology companies, one on each coast. Then: out of public view, it was back to the long investigative slog for Justice Department prosecutors and enforcement attorneys at the Securities and Exchange Commission -- poring over documents, interviewing witnesses. It could be a very long haul. Faced with a mountain of material and potential violations, the authorities are having to marshal their resources to concentrate on high-priority and more egregious cases of fraud involving the award of stock options. Just over 2,000 public companies, or 29 percent of those in the United States that give stock options to executives, have timing issues, according to ERIK LIE, an associate professor of finance at the University of Iowa, and Randall Heron, an Indiana University associate finance professor. But not all the backdating of options was illegal, and in some cases the evidence is insufficient for the government to make a case. In any event, investigators and prosecutors "don't have the time or the resources" to pursue every company, Lie said in a telephone interview. The same story appeared on the Web sites of the CONTRA COSA TIMES (CA), ST. LOUIS POST DISPATCH, PHILADELPHIA INQUIRER, RALEIGH NEWS & OBSERVER, MARCO ISLAND (NC) EAGLE, LONG ISLAND BUSINESS NEWS and

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