In a January 10, 2007 Wall Street Journal op-ed piece provocatively entitled “Should Steve Jobs Go to Jail?” (here, subscription required) the attorneys for Gregory Reyes, the former CEO Brocade Communications who faces criminal charges in connection with stock option activity at Brocade, present their view that “most options backdating cases” are
Apple Derivative Plaintiffs Allege Option Springloading
In their Consolidated Amended Shareholder Derivative Complaint filed December 18, 2006 in the federal court in San Jose, the plaintiff in the Apple Computer shareholders derivative action have zeroed in on alleged options springloading practices. A January 3, 2007 Los Angeles Times article entitled “At Apple, Timing Led to Overnight Windfalls” (here) describes
Compensation Consultant Named as Options Backdating Lawsuit Defendant
Shareholders suing Cablevision Systems over its backdated options have amended their complaint to add the company’s former compensation consultant as a defendant. According to news reports (here), the allegations against Lyons Benenson & Co., the company’s former compensation consultant, are the first in the nation to accuse a compensation advisor of taking part
Options Backdating Web Notes
Lucky CEOs: A new study by three leading academics claims to establish a link between governance practices and questionably timed stock options to chief executives. A November 16, 2006 study entitled “Lucky CEOs” (here) by Lucian Bebchuk of Harvard Law School, Yaniv Grinstein of Cornell, and Urs Peyer of INSEAD, examined
Options Backdating: Act Two?
One of the standard features of most articles discussing the options backdating scandal has been the obligatory statement that backdating largely disappeared after the 2002 passage of the Sarbanes-Oxley Act, as a result of the Act’s requirement (in Section 403(a)(2)) that all transactions in the company’s shares involving directors or officers must be documented
Tracking Options Backdating
According to news reports (here), Glass Lewis has released an analysis estimating that the options backdating scandal now involves 152 companies and has cost those companies collectively about $10.3 billion. A breakdown of the 152 companies can be found here.
CFO.com reports here that so far over 60 companies have announced accounting
Latest Options Backdating Dispatches
The options backdating story has unfolded in successive stages. First, there was the March 18, 2006 Wall Street Journal article (here, registration required) that drew attention to the issue and set off the media frenzy. Then there were the waves of announcements from companies stating that they or regulators were investigating their options
Options Backdating Litigation Update and Other Web Notes
The D & O Diary’s running tally of options backdating lawsuits (which can be found here) has been updated to include new securities lawsuits that have been filed against Meade Instruments and Michaels Stores; a new ERISA action against Home Depot; and several new shareholders’ derivative actions.
With the addition of the
Yes, But WHY Are They Filing Derivative Suits?
In recent days, there has been extensive media attention (here and here) focused on the fact that plaintiffs’ lawyers seeking to exploit the options backdating scandal are filing shareholders’ derivative suits in preference to securities fraud class action lawsuits. Indeed, The D & O Diary’s running tally of options backdating lawsuits (here
Capitol Hill Looks at Options Backdating
The unfolding options backdating story may have hit its high water mark (or its low point, depending on your perspective) on September 6, 2006, when the Senate Committee on Banking, Housing and Urban Affairs and the Senate Finance Committee both held hearings concerning options backdating. The hearings involved the testimony of numerous regulators, academics and