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Lie Rocks The Business World

In a year when the power of deep-pocketed and well-connected groups that influence finance and accounting surged, a 37-year-old professor in Iowa City rocked the business world with nothing more than a sharp mind, an Internet connection, some savvy data analysis and a couple of telephone calls. Research on stock options backdating by University of Iowa associate professor of finance ERIK LIE demonstrated that an inquisitive academic's work can be just as influential as hefty political contributions, access to legislators, entrenched networks and stout rolodexes. Lie's May 2005 article in an academic journal helped propel some 120 companies into the regulatory spotlight as a result of past stock option grants. Lie's findings and the chain reaction of responses they sparked will continue to influence the realm of finance and accounting in the coming months. "This issue has legs because of the continuing lawsuits and the fact that there are new cases popping up every week," Lie says. "There are a lot of [backdating] cases where the circumstantial evidence is rather strong, but those cases have not come to the surface yet."

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