Legal issues with backdating stock options

This is a fraud on the tax authorities, a criminal offence and is likely to get the lawyer who prepared the document disciplined by his regulator and possibly also charged as a co-conspirator.For obvious reasons, any request to backdate a document for these reasons should be flatly turned down.This re-authentication process will only be required once per session.Forgotten username can be emailed with validation of email address.Use One Pass to sign on to Westlaw, Practical Law, Westlaw Tax, Westlaw International, lawschool. Why do I have to create a One Pass profile to access Thomson Reuters products and websites?By asking our users to create their own passwords rather than using Thomson Reuters-assigned passwords, we will be able to provide better security.

The backdating concern occurs when the company does not disclose the facts behind the dating of the option.

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.

This means they must wait for the stock to appreciate before making any money.

Selecting your own username and password strengthens your ability to control access to Westlaw, as well as many other Web-based Thomson Reuters applications.

You will be the only person who knows your One Pass username and password.

(For more insight, see ) Although it may appear shady, public companies can typically issue and price stock option grants as they see fit, but this will all depend on the terms and conditions of their stock option granting program.

You must have an account to comment. Please register or login here!