It's been a decade since scores of corporations became embroiled in the “dating game” scandals over backdated CEO stock options, and most. Many companies' stock option plans provide market value on the date of the option grant. Now we've learned, from the back-dating scandal, that many companies were rigging the options game for years, effectively eliminating much of the uncertainty.
The problem with this practice, according to the SEC, was that stock option backdating, while difficult to prove, could be considered a criminal act. One of the larger backdating scandals occurred at Brocade Communicationsa data storage company. It allegedly failed to inform investors, or account for the options expense s properly. In the modern business world, the Sarbanes-Oxley Act has all but eliminated fraudulent options backdating by requiring companies to report all options issuances within 2 days of the date of issue.
However, in late and earlythe issue of stock options backdating gained a wider audience.
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