Stock Options Backdating: History and Background

Backdating stock options was brought to light for the first time by Erik Lie, professor of finance at the University of Iowa. He believes that at least 10% of all U.S. companies were backdated stock options.
Before SOX (Sarbanes-Oxley) law of 2002, studies of Mr. Lie and the Wall Street Journal revealed that companies awarded their executives stock options on dates immediately preceded a rise in the share price.
Here are the relevant articles on the topic: 1.
"Then Lie performed the mother of all stock options studies, looking at 5977 option grants between 1992 and 2002. In his paper, a year ago published, he found the same suspicious results as earlier researchers, but more pronounced. Further cutting and dicing the data , he discovered that unless executives had truly extraordinary skills to predict accurate overall market movements, they had to predate the grants. "
2. "The presumption is that some companies used to predate that window but, crucially, not well known and expense such action."
3. . 0.4521951 column "The greater the difference between the strike price and what the stock sells for on the open market, the more an option is worth. If you options to purchase at $ 50,100 IBM shares and IBM trades at $ 80, then Options intrinsically worth $ 30 each, or $ 3,000, but if the strike price is lower - say. $ 25, then the options are worth $ 55 each, or $ 5500. "
Link to many other press calls the "source"

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