Backdating stock options definition
There is no statute that explicitly outlaws backdating stock-option grants, but it seems virtually impossible to backdate options and achieve the ultimate goal of putting grants “in the money” without first deliberately falsifying documents and then covering up the sham.
At least that seems to be the conclusion reached by the Department of Justice and the Securities and Exchange Commission regarding their first case against executives charged with fraud related to backdating.
While options backdating has been used to enhance or increase the value of options contracts while reaping the tax benefits of having issued “at the money” contracts, the practice is also frequently necessary in order to accommodate situations in which lengthy issuance procedures or corporate policies require more than one day to complete an approval process, thus showing an earlier issue date than that on which the contracts are actually issued.
The SEC’s opinions regarding backdating and fraud were primarily due to the various tax rules that apply when issuing “in the money” stock options vs.
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.
idfubar (talk) , 14 December 2009 (UTC) "Options backdating is the practice of issuing options contracts on a later date than which the options have listed." This does not seem to clearly define backdating.This article is within the scope of Wiki Project Taxation, a collaborative effort to improve the coverage of tax-related articles on Wikipedia.Is Option or Employee stock option the better link?But are options really as great for all parties as many have assumed?
The stock option “backdating” scandal has implicated several (mostly technology) companies over the past few months.This is a way of repricing options to make them valuable or more valuable when the option "strike price" (the fixed price at which the owner of the option can purchase stock) is fixed to the stock price at the date the option was granted.