Backdating of executive
Similarly, the FBI has reported that it has 52 companies under criminal investigation. Department of Justice has said it will bring criminal charges where defendants falsify corporate books and records; issue false financial statements; lie to boards of directors, auditors or the SEC; or file false reports.
Two indictments have been issued and multiple guilty pleas have been entered in the most egregious cases. To a public corporation, the potential consequences of engaging in options backdating are manifold and can range from none whatsoever to having founders and CEOs going to prison. For example, in the case involving Brocade Communications, the SEC charged the former CEO and the former Vice President of Human Resources with criminally violating the securities laws.
She has been made subject to a section 43 order, which bans her from working in an SRA-regulated business without its permission.
The SRA said: “Ms Mason’s conduct makes it undesirable for her to be involved in a legal practice because it was dishonest and had the potential to mislead the court and others.“It is important for the administration of justice that the court and others are able to rely on the statements and actions of those employed in the legal profession.”In deciding that a rebuke was proportionate, the notice said, the SRA took into account that Ms Mason “made prompt admissions when her conduct was discovered”, the firm has ensured that the client did not suffer any financial detriment, and Ms Mason “was experiencing difficult personal circumstances at the relevant time”.
We document several mechanisms used to lower stock price, including changing the substance and timing of disclosures.
We appreciate helpful comments from an anonymous referee, Yakov Amihud, Louca Christodoulos, Jeff Coles, Michael Drake, Jarrad Harford (the editor), William Hubbard, Dirk Jenter, Wei Jiang, Marcel Kahan, Steven Kaplan, Jonathan Karpoff, Ron Kasznik, Mike Klausner, Dave Larcker, Erik Lie, Allan Mc Call, Todd Mitton, Brennan Platt, Ryan Pratt, and David Yermack, as well as seminar participants at Brigham Young University, University of Chicago, Columbia University, Harvard University, Northwestern University, New York University, Stanford University, Yale University, the 2013 American Law and Economics Association conference, and the 2014 European Financial Management Association conference.
A paralegal has been banned from working in the profession after she backdated a witness statement having missed the deadline to serve it.
Likewise, in a case involving Comverse Technology Inc., the U. Attorney charged the former CEO, the former CFO, and the former General Counsel with violating securities laws.
We show that some CEOs have manipulated stock prices to increase option compensation, documenting negative abnormal returns before scheduled option grants and positive abnormal returns afterward.
These returns are explained by measures of CEOs’ incentives and ability to influence stock prices.
She received the statement from her client on 23 May, and changed the date on it to 23 April.
She then filed the re-dated statement with the court.