wine dating in montreal - Options back dating scandal

The revelation that scores of firms engaged in the illegal manipulation of stock options’ grant dates (i.e. The evidence indicates that the consequences stemming from management misconduct and misrepresentation are of first-order importance in this context as shareholders of firms accused of backdating experience large negative, statistically significant abnormal returns.Furthermore, shareholders’ losses are directly related to firms’ likely culpability and the magnitude of the resulting restatements, despite the limited cash flow implications.The academics concluded that something funny was going on.

despite the Black Berry maker announcing a change to its board of directors and taking a $250-million (U. Options are supposed to be granted with an exercise price equal to the company's share price, so they only become valuable in the future if the share price rises. Lascaris added his client will proceed with its lawsuit despite yesterday's announcement.

regulators will continue to investigate Research in Motion Ltd. The review found instances in which "hindsight was used" to select favourable dates to grant stock options, resulting in employees getting options that were already valuable when they were granted.

United Health Group CEO Stephen Hemsley was more involved in the handling of backdated stock options than previously revealed, according to new documents filed in a shareholder lawsuit that is moving toward a fall trial.

Despite two company-ordered investigations that largely exonerated Hemsley from the backdating scandal, the latest filing in U. District Court in Minneapolis attempts to paint a different portrait of Hemsley and the corporate practice of providing top executives with favorably priced option grants.

No one's pay was "inflated" by backdating, unless you assume that the alternative would have been awarding executives exactly the same number of options at less-advantageous prices.

Which, of course, you shouldn't assume since any sensible employee can see that if his each stock option is worth less, he should get more of them.

The total compensation to executives granted back-dated options was either unchanged or, perhaps, lower than it would have been, since people tend to irrationally over-value a bird in hand (in the money options) to a dozen in the bush (out of the money options).

But it all became worse than a pseudo-scandal, in fact.

The reason for doing this was simple: stock options priced at or above where the stock is trading (aka, "out of the money" options) get favorable tax treatment compared to stock awards priced below the market price (aka, "in the money" options).

It was a tax advantaged way for companies to pay executives. Shareholders were correctly told the number of options granted and the price of the options.

He said it was an error due to a misunderstanding of accounting rules. executives and directors have resigned or been fired after internal reviews of options backdating problems. The company hopes to put its stock options issues in the past, but regulators say they are continuing to probe RIM's options practices. "When a company does an internal review, that helps speed our process, but it's not a substitute for our process," one U. RIM also announced it has appointed two new independent directors and is searching for two others. Balsillie and co-CEO Mike Lazaridis will pay -million each to cover the company's costs of investigating the options problems.

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