Backdating options legal datingonline ie
A stock option granted, for example, on the day you join the company allows you the right to buy that share at that day's price, but not until a fixed period – say a year – has elapsed.
If the price has risen in that time you can buy the share at the option price, sell it and pocket the profit.
Indeed, with more than 80 companies being reviewed by the SEC for potential illegal backdating practices, and one academic study claiming that more than 2,000 companies have engaged in the practice, civil and criminal charges will probably mushroom in the next few months. The purpose of backdating is straightforward: it gives options holders an immediate paper gain, and a real gain once the option is exercised.
Backdating option grants to, for example, just before an announcement that had a positive share price effect would be equivalent to granting the option in a prohibited period.
Directors are rightly highly sensitive about share dealing because they can be censured by the stock exchange; prosecuted for abusing the market by the Financial Services Authority; or even summarily dismissed by the company itself.
So the scandal and court intrigue in the US is unlikely to be repeated here because tight regulation has ensured that a backdating culture simply never developed in the first place.
All companies at some stage of their development are subject to strategic change.