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Lie Documents Widespread Stock Option

A year after John C. Burris was hired as senior vice president of Citrix Systems, the company's compensation committee granted him options for 42,000 shares of company stock valued at $15.69 a share, according to court documents. The stock option grant was dated July 24, 2000. Just 15 days later, the Fort Lauderdale, Fla., software company's stock traded on Nasdaq at $18.25 a share, giving Burris a $107,520 windfall on paper. But lawsuits brought on behalf of Citrix shareholders say that's not a coincidence. They contend Burris and other executives received falsely backdated stock options to reap large profits that cheated shareholders. Stock options backdating is not new, having occurred as early as 1997. Although eventually regulated, there was no real crackdown until the past year, after University of Iowa professor ERIK LIE documented how widespread backdating had become. He noticed that stock prices shot up immediately after corporate boards made option awards. The Wall Street Journal reports followed up on Lie's work.


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