Brocade backdating options how to setup dating online

Some executives have, well, at least when it comes to their stock options.In order to lock in a profit on day one of an options grant, some executives simply backdate (set the date to an earlier time than the actual grant date) the exercise price of the options to a date when the stock was trading at a lower level. In this article, we'll explore what options backdating is and what it means for companies and their investors. Most businesses or executives avoid options backdating; executives who receive stock options as part of their compensation, are given an exercise price that is equivalent to the closing stock price on the date the options grant is issued.That is, they grant their executives stock options with an exercise price (or price at which the employee can purchase the common stock at a later date) equivalent to the market price at the time of the option grant.They also fully disclose this compensation to investors, and deduct the cost of issuing the options from their earnings as they are required to do under the Sarbanes-Oxley Act of 2002.(In 2004, FAS 123 was revised to require that all stock-option grants be expensed.) Brocade’s crime, charges the Do J, is that between 20, company executives “routinely backdated stock option grants to give employees favorably priced options without recording necessary compensation expenses.” Ultimately, the alleged criminal fraud is a disclosure and accounting issue that violates Section 10 (Manipulative and Deceptive Devices) of the Securities Exchange Act of 1934.The Do J claims that by not properly accounting for the options expenses, the company’s financial condition was misrepresented to investors. Tax Code, a company can take up to a

Some executives have, well, at least when it comes to their stock options.In order to lock in a profit on day one of an options grant, some executives simply backdate (set the date to an earlier time than the actual grant date) the exercise price of the options to a date when the stock was trading at a lower level. In this article, we'll explore what options backdating is and what it means for companies and their investors. Most businesses or executives avoid options backdating; executives who receive stock options as part of their compensation, are given an exercise price that is equivalent to the closing stock price on the date the options grant is issued.That is, they grant their executives stock options with an exercise price (or price at which the employee can purchase the common stock at a later date) equivalent to the market price at the time of the option grant.They also fully disclose this compensation to investors, and deduct the cost of issuing the options from their earnings as they are required to do under the Sarbanes-Oxley Act of 2002.(In 2004, FAS 123 was revised to require that all stock-option grants be expensed.) Brocade’s crime, charges the Do J, is that between 20, company executives “routinely backdated stock option grants to give employees favorably priced options without recording necessary compensation expenses.” Ultimately, the alleged criminal fraud is a disclosure and accounting issue that violates Section 10 (Manipulative and Deceptive Devices) of the Securities Exchange Act of 1934.The Do J claims that by not properly accounting for the options expenses, the company’s financial condition was misrepresented to investors. Tax Code, a company can take up to a $1 million deduction for performance-based compensation awarded to “covered” executives.Last week the Do J brought criminal charges against two Brocade Communications Systems executives, while the SEC filed a civil suit against the same two and the CFO.

||

Some executives have, well, at least when it comes to their stock options.

In order to lock in a profit on day one of an options grant, some executives simply backdate (set the date to an earlier time than the actual grant date) the exercise price of the options to a date when the stock was trading at a lower level. In this article, we'll explore what options backdating is and what it means for companies and their investors. Most businesses or executives avoid options backdating; executives who receive stock options as part of their compensation, are given an exercise price that is equivalent to the closing stock price on the date the options grant is issued.

That is, they grant their executives stock options with an exercise price (or price at which the employee can purchase the common stock at a later date) equivalent to the market price at the time of the option grant.

They also fully disclose this compensation to investors, and deduct the cost of issuing the options from their earnings as they are required to do under the Sarbanes-Oxley Act of 2002.

(In 2004, FAS 123 was revised to require that all stock-option grants be expensed.) Brocade’s crime, charges the Do J, is that between 20, company executives “routinely backdated stock option grants to give employees favorably priced options without recording necessary compensation expenses.” Ultimately, the alleged criminal fraud is a disclosure and accounting issue that violates Section 10 (Manipulative and Deceptive Devices) of the Securities Exchange Act of 1934.

The Do J claims that by not properly accounting for the options expenses, the company’s financial condition was misrepresented to investors. Tax Code, a company can take up to a $1 million deduction for performance-based compensation awarded to “covered” executives.

Last week the Do J brought criminal charges against two Brocade Communications Systems executives, while the SEC filed a civil suit against the same two and the CFO.

million deduction for performance-based compensation awarded to “covered” executives.Last week the Do J brought criminal charges against two Brocade Communications Systems executives, while the SEC filed a civil suit against the same two and the CFO.

By pushing the date into the past, to a time when the underlying stock traded at a lower price than it did the day the grant was issued, the option holder is, in effect, being given the promise of cash.

In a worst-case scenario, bad press and restatements may be the least of a company's worries.

In this litigious society, shareholders will almost certainly file a class-action lawsuit against the company for filing false earnings reports.

But, there are also some companies out there that have bent the rules by both hiding the backdating from investors, and also failing to book the grant(s) as an expense against earnings.

On the surface - at least compared to some of the other shenanigans executives have been accused of in the past - the options backdating scandal seems relatively innocuous.

Leave a Reply