Backdating is not sufficient to prove fraud
Backdating is not sufficient to prove fraud, a US federal judge in San Francisco rules. Good news for 200 companies that have undertaken internal investigations into backdated options. Board committee of Cnet Networks finds no wrongdoing by current or recently resigned executives or board members. In shareholder lawsuits, Judge William Alsup asserts, inference that fraud occurred is improper absent other facts indicating fraud. Stephen Taub and Dave Cook - CFO.com | US A federal judge in San Francisco has dismissed most of a shareholder derivative lawsuit against Cnet Networks regarding backdated stock-option grants, according to The Recorder. Late last week, reported the ...
Explaining Backdating
(1) Why do firms backdate? (2) What are the consequences of backdating? and (3) What is the theory of harm, if any, upon which we are going to base civil and criminal prosecutions? It is remarkable, but not incredibly surprising, how little attention has been paid to these questions. This academic, legal, and economics blog addresses some underexamined issues related to backdating from the business and legal perspectives: namely that the backdated options have been a common and accepted form of executive compensation that does not have any inherent relationship to fraud and fraudulent practices; that many backdated stock options ...
The Backdating Molehill
Criminal charges related to backdating are dismissed against Broadcom co-founder Henry Nicholas III. The government's behavior is described as "shameful." Nicholas, Broadcom's largest shareholder, did not benefit from any backdated stock options. Clearly, the primary goal of backdating is to motivate employees at the lowest possible cost to shareholders. By HOLMAN W. JENKINS, JR. It pains us, naturally, to see our forecasts and premonitions borne out in such exacting detail in the government's backdating prosecutions—why didn't we take our moment of searing foresight to the dog track instead? Yesterday a judge threw out, with resort to unceremonious language, criminal charges against Broadcom co-founder Henry Nicholas III. Mr. ...
