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Lie Advice: Admit To Backdating Before You're Caught

Two more CEOs hit by the scandal over stock options stepped down Wednesday, highlighting the risk to companies -- and investors -- stung by the backdating bullet. The chief executives of McAfee and CNET both resigned Wednesday, the latest fallout in the growing scandal over the timing of stock option grants. A lot of people involved in the backdating mess probably think not they're going to get caught, but that's a calculated risk they're taking, according to ERIK LIE, an associate professor of finance at the University of Iowa whose research first cast options backdating into the spotlight. With the list of companies hit by the options saga growing -- and Lie expects the number of companies involved to grow to at least a couple of hundred -- it's a good idea to get ahead of an investigation. "It's always better to come clean, restate and settle with anybody suing the company so you can move forward as soon as possible," he said.

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