The thing I liked about the Journal's treatment of the Alexander case was how the reporter managed to be respectful toward the Namibian legal system while at the same time hinting to readers that not every society has the same attitude toward Option backdating scandals: how management accountants can help: backdating of employee stock options can have a significant negative effect on a public company.Stock option backdating has erupted into a major corporate scandal, involving potentially hundreds of publicly-held companies, and may even ensnare Apple's icon, Steve Jobs.Financial Services Law360 UK and Insurance Law360 UK provide breaking news and in-depth analysis on U. and European Union regulation, enforcement, legislation, and litigation involving banks, investment firms, insurers, and more.
Cases of backdating employee stock options have drawn public and media attention.
According to a study by Erik Lie, a finance professor at the University of Iowa, more than 2,000 companies used options backdating in some form to reward their senior executives between 19.
While the focus of the Securities and Exchange Commission ("SEC") centers on improper accounting practices and disclosures, thereby violating securities laws, a major yet little explored consequence to the scandal involves potentially onerous taxes on those who received these options.
Basically, a stock option is a contract right to purchase an amount of stock at a set price for a period of time.
Options backdating occurs when companies grant options to their executives that correspond to a day where there was a significantly lower share price.