Consequences of backdating stock options Chatroulette mobile cam
This pioneering study was published in the Journal of Finance in 1997, and is definitely worth reading.In a study that I started in 2003 and disseminated in the first half of 2004 and that was published in Management Science in May 2005 (available at I found that stock prices also tend to decrease before the grants.This made me think about the possibility that some of the grants had been backdated.
To the extent that companies comply with this new regulation, backdating should be greatly curbed.
Unless corporate insiders can predict short-term movements in the stock market, my results provided further evidence in support of the backdating explanation.
In a second study forthcoming in the Journal of Financial Economics (available at Randy Heron of Indiana University and I examined the stock price pattern around ESO grants before and after a new SEC requirement in August of 2002 that option grants must be reported within two business days.
There is also some relatively early anecdotal evidence of backdating.
A particularly interesting example is that of Micrel Inc.