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Backdating Scandal Growing

The scandal of the backdating of executive and employee share options by U.S. companies grows inexorably. More than 30 chief executives and other board directors have lost their jobs, the latest being Kenneth Levy, chairman of KLA-Tencor, and William McGuire, chief executive of United Health. In spite of the fact that so many companies are being investigated, others will escape. ERIK LIE, a professor at the University of Iowa, estimates that 14 percent of all grants to top US executives between 1996 and 2005 were backdated or manipulated. The practice appears to have been particularly widespread in Silicon Valley, where stock options were awarded to many employees.

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