News & Events

Lie Comments on Backdating Probe

On Nov. 27, Affiliated Computer Services reported the results of an internal probe into the backdating of option grants at the Dallas technology services company. That, in and of itself, isn't so unusual. More than 200 companies have been touched by the scandal. What was surprising is that ACS's stock surged 6 percent on the news. What got investors' attention was the extent of the company's housecleaning. Experts say ACS's actions sent a clear and much-needed signal to investors: that the board was serious about cleaning up the backdating mess. "I think firing people is necessary in some cases," says ERIK LIE, an associate professor of finance at the University of Iowa who conducted the original research that uncovered widespread options backdating. "You want shareholders to see that you're addressing the issues."

Return to top of page