Brocade communications options backdating Ukranian girls free chat camera
The problem with this practice, according to the SEC, was that stock option backdating, while difficult to prove, could be considered a criminal act.One of the larger backdating scandals occurred at Brocade Communications, a data storage company.In essence, the revision enabled companies to increase executive compensation without informing their shareholders if the compensation was in the form of stock options contracts that would only become valuable if the underlying stock price were to increase at a later time.In 1994, a new tax code (162 M) provision declared all executive income levels over one million dollars to be “unreasonable” in order to increase taxes on all applicable salaries by removing them from their previous tax-deductible status.It was forced to restate earnings by recognizing a stock-based expense increase of 3 million between 19, after allegedly manipulating its stock options grants for the benefit of its senior executives.It allegedly failed to inform investors, or account for the options expense(s) properly.Cases of backdating employee stock options have drawn public and media attention.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.
Additionally, companies can use backdating to produce greater executive incomes without having to report higher expenses to their shareholders, which can lower company earnings and/or cause the company to fall short of earnings predictions and public expectations.
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.
A federal jury convicted Reyes in August 2007 of 10 criminal charges, including conspiracy and securities fraud, siding with prosecutors who maintained he exploited his powerful corporate position to rig stock options for employees.
The convictions marked a dramatic downfall for the 46-year-old Reyes, whose case became a fleeting symbol in the government’s probe of dozens of valley companies accused of the same backdating practices.