Stock Options Backdating

Jury hands Merck a split decision on Vioxx cases - Examiner.com

2007-03-07T10:57:00.000-08:00

Jury hands Merck a split decision on Vioxx cases - Examiner.com: "A state jury dealt Merck & Co. a mixed verdict Friday in the drugmaker's latest trial over its former painkiller Vioxx.

The Atlantic City jury ruled Merck was negligent and did not properly warn doctors about the cardiovascular risks in the case of one former Vioxx user who survived a heart attack. The ruling sets the stage for a second trial phase, starting Monday, to consider whether Vioxx caused the heart attack suffered by Frederick 'Mike' Humeston, 61, of Boise, Idaho, and whether he deserves compensatory damages." [Examiner.com]

Family Dollar Execs Sued over Backdating

2006-09-21T13:30:00.000-07:00

Family Dollar Execs Sued over Backdating: "Ten Family Dollar officials and directors, including its chief financial officer, have been sued by a shareholder, accusing them of improperly earning millions of dollars from exercising backdated stock options over six years, according to The Charlotte Observer." [CFO.com]

Neowin.net - Activision sued over stock option grant practices

2006-09-21T13:29:00.000-07:00

Neowin.net - Activision sued over stock option grant practices: "An Activision shareholder has sued the video game maker over its stock option grant practices alleging improprieties in the company's issuance of stock options and targeting both former and current executives in the latest backdating scandal. The lawsuit alleges that Activision backdated its stock options to the financial benefit of numerous executives and the detriment of the company and its shareholders. " [NeoWin.net]

Daily Kos: The Options Back Dating Scandal: Overview and Explanation

2006-09-21T13:28:00.000-07:00

Daily Kos: The Options Back Dating Scandal: Overview and Explanation: "A new financial scandal has emerged over the last year or so. It's the options back dating scandal. By altering the date when a company officially granted an option, an executive could increase the amount of his actual pay and lower his tax liability on his executive compensation. This week, SEC head Christopher Cox testified before Senate to give Senators an update on the situation. His testimony gives a great overview of what is actually involved with the scandal as well as the status of current enforcement actions." [Daily KOS]

Plugged In: Why options backdating is a big deal - Jul. 26, 2006

2006-09-21T13:27:00.000-07:00

Plugged In: Why options backdating is a big deal - Jul. 26, 2006: "For the past several weeks I've been asking experts (to be precise: lawyers) if they think the options backdating scandal is a big deal with major ramifications, a medium-sized brouhaha that will fade after the egregious abusers have been punished, or a tempest in a teapot we'll have forgotten by Christmas.

Wishful thinking aside, almost nobody believes it's Door No. 3, a scandal-of-the-day wiped out by the next news cycle. The question on backdating then remains: pervasive rot in the system or technical malfunction that needs to be cleared up?" [CNN]

ICANNWatch | VeriSign receives subpoena relating to stock option backdating

2006-09-20T16:03:00.000-07:00

ICANNWatch | VeriSign receives subpoena relating to stock option backdating: "GeorgeK writes 'VeriSign has reported that they are cooperating with a grand jury subpoena and a SEC inquiry into their historical stock option grants. More can be found here. Backdating of options is essentially a fraud against existing shareholders, as noted in the press or simply searching Google for 'backdating fraud'." [ICANN Watch]

Scandal over executive stock options hits techs hard - May. 24, 2006

2006-09-20T16:02:00.000-07:00

Scandal over executive stock options hits techs hard - May. 24, 2006: "Stock options, a perennial thorn in the side of technology companies, have come back to haunt the sector in a big way.

Questions over stock option grants for executives have sparked federal investigations of more than a dozen companies, many of which are technology firms." [Money.CNN]

Stock Options: The Backdating Games

2006-09-20T16:01:00.000-07:00

Stock Options: The Backdating Games: "Following a yearlong investigation, it appears the Securities and Exchange Commission is finally beginning to crack down on companies with questionable policies governing stock-option grants. In November, management at Analog Devices Inc. agreed to pay $3 million to settle an SEC investigation into the company's handling of stock-option awards. And three senior managers at software maker Mercury Interactive Corp. recently resigned after an SEC probe uncovered problems with the reporting of stock-option issuances. Published accounts say the commission is looking at about a dozen companies, and appears to be zeroing in on the backdating of grants." [CFO]

Next Step in Stock Option Probes: 'Backdate' Lawsuits

2006-09-20T16:00:00.000-07:00

Next Step in Stock Option Probes: 'Backdate' Lawsuits: "Securities class action lawyers are preparing for the next wave of shareholder lawsuits as more companies and their top executives face federal probes and accounting restatements linked to the backdating of their stock options." [Law.com]

Stock Options Backdating Information Center - ISS

2006-09-20T15:59:00.000-07:00

Stock Options Backdating Information Center - ISS: "To keep our clients informed on the latest developments, Institutional Shareholder Services (ISS) has created an Options Backdating Information Center.

The center contains a new ISS white paper, An Investor Guide to the Stock Option Timing Scandal, which offers ISS’ perspective on best practices surrounding option grant policies. Additionally, the center has two recent options backdating studies by Dr. Erik Lie, Associate Professor of Finance at The University of Iowa, and Dr. Randall Heron, Associate Professor of Finance at Indiana University." [ISS]

SEC turns scrutiny to stock option backdating

2006-09-20T15:58:00.000-07:00

SEC turns scrutiny to stock option backdating: "Securities and Exchange Commission Chairman Christopher Cox said Tuesday that possible stock option backdating is 'a matter of ongoing interest to our enforcement division.'

He said the SEC is also looking at option issues as it considers public comments on a proposed rule that would require better disclosure of executive compensation. 'The manner in which this is reported is one means of tightening up the way in which companies issue this form of compensation,' Cox said after testifying to the Senate Banking committee on financial literacy." [USAToday]

Broadcom problem grows

2006-09-20T15:57:00.000-07:00

Broadcom problem grows: "Broadcom warned investors Friday that its internal review of misdated stock options had uncovered deeper problems that will force it to recognize at least $1.5 billion in expenses -- double the Irvine company's original estimate in July." [MercNews]

MercuryNews.com | 09/10/2006 | Firms tweaking ways of awarding options

2006-09-20T15:56:00.000-07:00

MercuryNews.com | 09/10/2006 | Firms tweaking ways of awarding options: "Some companies are tweaking their stock option plans to better peg payoffs to performance, encourage executives to manage with a long-term view and to make it harder to manipulate the pricing of options. Here's a sampler of changes recently disclosed, according to Equilar, a San Mateo provider of information on executive compensation:" [MercNews]

Authorities probe improper backdating of options

2006-09-20T15:55:00.000-07:00

Authorities probe improper backdating of options: "Federal regulators and academics, scrutinizing a broad pattern of well-timed stock-option grants, are exploring the extent to which companies improperly backdated grants to provide insiders an extra pay windfall." [Post-Gazette]

A study in CEO greed - May. 30, 2006

2006-09-20T14:45:00.000-07:00

A study in CEO greed - May. 30, 2006: "One of the questions crying loudest from the developing scandal of backdating stock options is, Why now?

As new companies announce daily that they're investigating their stock option practices or that they've received inquiries from the SEC or federal prosecutors - United Health Group, Caremark Rx, (Research) and Juniper Networks (Research) are among those that have acknowledged ongoing probes - you have to wonder what sparked the mess. After all, we're talking about pre-2002 behavior, mostly from the '90s." [Fortune]

Options saga heats up as more companies are named - Jul. 12, 2006

2006-09-20T14:39:00.001-07:00

Options saga heats up as more companies are named - Jul. 12, 2006: "The list of companies being investigated in the stock-options saga grows longer by the day and could easily climb much higher, according to the professor whose research brought the issue to light.

"More than 50 companies are being investigated by the Securities and Exchange Commission and federal prosecutors over whether they 'backdated' or otherwise manipulated the dates they granted stock options to employees to make the options more lucrative, according to Reuters." [CNNMoney]

Cheesecake Factory Is Reviewing Option Grants

2006-09-20T14:39:00.000-07:00

Cheesecake Factory Is Reviewing Option Grants: "Cheesecake Factory Inc. became the latest company to report that it is investigating the pricing of stock-option grants.

The Calabasas Hills, Calif., restaurant chain said the audit committee of the board had begun a review of options-grant practices. The company said the review was voluntary and prompted by recent media and Wall Street reports of practices at other companies." [WSJ]

Barnes & Noble Gets Subpoena; Novell Starts Internal Options Probe

2006-09-20T14:38:00.000-07:00

Barnes & Noble Gets Subpoena; Novell Starts Internal Options Probe: "Barnes & Noble Inc. disclosed Tuesday that it received a subpoena from the U.S. Attorney for the Southern District of New York for documents regarding its stock-option practices." [WSJ]

AMCC Responds to Derivative Lawsuit

2006-09-20T14:37:00.001-07:00

AMCC Responds to Derivative Lawsuit: "Applied Micro Circuits Corporation (Nasdaq: AMCC) today announced that a derivative lawsuit has been filed in United States District Court for the Northern District of California against nine former officers of the Company alleging improper dating of stock options granted to these former officers on five occasions during the period from March 1998 through December 2000. The suit also names as defendants all of the current members of AMCC's Board of Directors. AMCC previously announced that its Audit Committee had begun a self-initiated review of the Company's historical stock option grant practices and related accounting. That review is still underway." [PRNewswire]

Apple Announces Update Regarding Stock Option Grants

2006-09-20T14:37:00.000-07:00

Apple Announces Update Regarding Stock Option Grants: "Apple today announced that it has been notified of derivative lawsuits filed in the United States District Court for the Northern District of California and the Superior Court for Santa Clara County. Both suits make claims against current and former officers and directors with respect to the company's awarding of stock option grants." [Apple]

HP shareholder files suit over scandal

2006-09-20T14:36:00.000-07:00

HP shareholder files suit over scandal: "A U.S. congressional panel wants to question key figures in the scandal surrounding Hewlett-Packard Co.'s (NYSE: HPQ) investigation of media leaks, while a shareholder lawsuit was filed in state court accusing the company's top brass of breaching their duties." [TheStar]

HP execs asked to testify in Washington; shareholder files suit

2006-09-20T14:35:00.000-07:00

HP execs asked to testify in Washington; shareholder files suit: "A congressional panel wants to question key figures in the scandal surrounding Hewlett-Packard Co.'s investigation of media leaks, while a shareholder lawsuit was filed in state court accusing the company's top brass of breaching their duties." [SFGate]

American Tower Hit by Suit

2006-09-20T14:34:00.000-07:00

American Tower Hit by Suit: "American Tower reported Tuesday it was on the receiving end of two lawsuits over its stock option grants and accounting.

One lawsuit is a securities class action filed in the United States District Court for the District of Massachusetts against the Boston-based operator of cellular and broadcast wireless towers." [Red Herring]

Backdating of Executive Stock Options

2006-09-20T14:33:00.000-07:00

Backdating of Executive Stock Options: "What is the benefit of backdating ESO grants?

ESOs are usually granted at-the-money, i.e., the exercise price of the options is set to equal the market price of the underlying stock on the grant date. Because the option value is higher if the exercise price is lower, executives prefer to be granted options when the stock price is at its lowest. Backdating allows executives to choose a past date when the market price was particularly low, thereby inflating the value of the options. " [UIOWA]

FAQ: Behind the stock options uproar | CNET News.com

2006-09-20T14:32:00.000-07:00

FAQ: Behind the stock options uproar | CNET News.com: "The tech industry's stock option backdating scandal appears to be gathering steam.

Last week, federal investigators announced criminal charges against former executives of Brocade Communications Systems, and they're hinting that more cases may be on the way. Meanwhile, Silicon Valley's top lawyers are scrambling to assuage their clients' fears, and the U.S. Security and Exchange Commission has said that the investigation will expand beyond technology companies to other publicly traded outfits. Already, some companies have begun restating years worth of financial results." [c|net]