Backdating stock options wikipedia

However, in late 2005 and early 2006, the issue of stock options backdating gained a wider audience.Numerous financial analysts replicated and expanded upon the prior academic research, developing lists of companies whose stock price performance immediately after options grants to senior management (the purported dates of which can be ascertained by inspecting a company's Form 4 filings, generally available online at the SEC's website) was suspicious.While this conclusion is logical in cases of options backdating in which executives knowingly participated in the criminal actions, options backdating can be a result of normal accounting or corporate policies that are not criminal in nature, and is a legal practice as long as the backdated contract is appropriately reported for tax purposes.Academic researchers had long been aware of the pattern, exhibited by some companies, of share prices rising dramatically in the days following grants of stock options to senior management.It was forced to restate earnings by recognizing a stock-based expense increase of 3 million between 19, after allegedly manipulating its stock options grants for the benefit of its senior executives.

At one extreme, where it is clear that top management was guilty of conscious wrongdoing in backdating, attempted to conceal the backdating by falsifying documents, and where the backdating resulted in a substantial overstatement of the company's profitability, SEC enforcement actions and even criminal charges have resulted.However, if the company granted options with an exercise price below fair market value, there would be a compensation expense that had to be recognized under applicable accounting rules.If a company backdated its stock options, but failed to recognize a compensation expense, then the company's accounting may not be correct, and its quarterly and annual financial reports to investors may be misleading.There is a five-year statute of limitations for securities fraud, and under the Sarbanes-Oxley Act of 2002, option grants to senior management must be reported within two days of the grant date.This all but eliminated the opportunity for senior management to engage any meaningful options backdating.

Options backdating may still occur under the new reporting regulations, but Sarbanes-Oxley compliant backdating is far less likely to be used for dishonest reasons due to the short time frame that is allowed for reporting.

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From Wikipedia, the free encyclopedia. Options backdating is the practice of granting an employee stock option that is retroactively dated to increase its value. 
09-Feb-2019 14:41
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Definition of Options backdating in the. Wikipedia. Backdating. In options backdating, a company issues stock options on one date but provides fraudulent. 
09-Feb-2019 14:45
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What is OPTIONS BACKDATING. OPTIONS BACKDATING explanation. Source. Cases of backdating employee stock options have drawn public and. 
09-Feb-2019 14:50
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Backdating stock options wikipedia introduction

Backdating stock options wikipedia

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