Stock backdating definition


21, 2014 /PRNewswire/ -- Shares in Ocwen Financial Corporation ("Ocwen" or the "Company") (NYSE: OCN) have plunged approximately 20%-its largest intraday drop since October 2008-after New York's Department of Financial Services accused the company of improperly option grants to periods of lower share prices (Yermack, 1997; Aboody and Kasznik, 2000; Chauvin and Shenoy, 2001; Lie, 2005; Heron and Lie, 2007; and Narayanan and Seyhun, 2006), or decreasing earnings to suppress share price when options are granted (Baker, Collins, and Reitenga, 2003; Cheng and Warfield, 2005; Bergstresser and Philippon, 2006; Cornett, Marcus, and Tehranian, 2008; Mc Anally, Srivastava, and Weaver, 2008).In the context of mutual funds, a feature allowing fundholders to use an earlier date on a letter of intent to invest in a mutual fund in exchange for a reduced sales charge, e.g.There are certain situations, however, when backdating is acceptable; however, the parties involved must agree to it.There was a spate of backdating stock options in the 2000s, mostly at technology firms that rely heavily on stock options for executive compensation, but also at some companies not in the tech sector.The act of dating a document before the date it was actually signed.For example, if one signs a contract on February 1, one may backdate it to January 31.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 versus the much different – and more financially beneficial – tax rules that apply when issuing “at the money” or "out of the money" stock options.

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According to a study by Erik Lie, a finance professor at the University of Iowa, more than 2,000 companies used options backdating in some form to reward their senior executives between 19.Options backdating is the practice of altering the date a stock option was granted, to a usually earlier (but sometimes later) date at which the underlying stock price was lower.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.Milberg, Barroway Topaz and Bernstein Litowitz Jointly Announce $62 Million Settlement in Comverse Technology Stock Option Backdating Derivative Case; $60 million to be paid by former Comverse CEO Kobi Alexander; former general counsel and CFO also contributing, along with auditor Deloitte; additional corporate governance reforms undertaken scandal that not only forced Mc Guire to step down as United Health's CEO, but also served as one of the pivotal cases that thrust backdating into the spotlight as the biggest corporate accounting fiasco since the chicanery of Enron, et al.

Legal niceties color backdating cases; There hasn't been a huge wave of class-action suits triggered by the scores of investigations and allegations of improper stock option backdating.

Setting the date of an employee stock option to an earlier time than when the option was actually granted. Backdating the option is not illegal, but the improper disclosure of the activity to the Securities and Exchange Commission is considered illegal.


Stock backdating definition comments


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    paulette60

    Options backdating is the practice of altering the date a stock option was granted, to a usually earlier but sometimes later date at which the underlying stock.…
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    paulette60

    Options backdating read the definition of Options backdating and 8,000+ other financial and investing terms in the Financial Glossary.…
  • What is Options Backdating? definition and meaning profil de paulette60

    paulette60

    Definition of options backdating Setting the date of an employee stock option to an earlier time than when the option was actually granted. This can.…