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Lie Stock Option Research Noted

When ERIK LIE began studying the influence of stock options on company behavior, he wasn't searching for a scandal. Lie, a 38-year-old finance professor at the University of Iowa, was just checking out a hunch. "It was a side project," he recalls. "I wasn't sure I'd find anything significant. And he didn't, at first. But as Lie kept crunching numbers, he stumbled across some explosive data: Hundreds of companies appeared to be manipulating stock-option accounting rules for profit. A later study done with his research partner, Indiana University associate professor Randall Heron, puts the number at 2,000, or 29 percent of all public corporations. Lie and Heron are cited in the article about "star" professors at business schools.

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