Option backdating and board interlocks

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Below are the most common reasons: This site uses cookies to improve performance by remembering that you are logged in when you go from page to page.To provide access without cookies would require the site to create a new session for every page you visit, which slows the system down to an unacceptable level.That's because the odds are extremely small, they say, that a company would randomly pick a date so conveniently sandwiched between a large price drop and a subsequent price hike.Even so, the researchers didn't assume that a company had engaged in backdating unless at least 20 percent of its option grants were suspicious.The researchers would not have been able to reach statistically meaningful results based only on the 120 or so companies that regulators have publicly identified as under investigation for possible options backdating.

In general, only the information that you provide, or the choices you make while visiting a web site, can be stored in a cookie.To identify these additional companies, they looked at the behavior of the companies' stocks in the days before and after the option grant dates.If the price of a company's stock fell substantially just before the grant date, then rose substantially immediately after, the researchers flagged the grant as suspicious.Bizjak of Portland State University in Oregon and Michael L.Lemmon of the University of Utah, as well as one of Professor Lemmon's graduate students, Ryan J. A version of the study, ''Option Backdating and Board Interlocks,'' is at com/sol3/papers.cfm? Options backdating, of course, involves retroactively granting options to executives and directors on dates when a company's stock price was lower.

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