Backdating investigation


A: It depends on the nature of the personal grudge.Among other things, IGs are authorized to investigate allegations of violation of law, rules, or regulations; mismanagement; gross waste of funds; abuse of authority; or a substantial and specific danger to the public health and safety. IGs may also investigate allegations of employee administrative misconduct and criminal conduct.Lawyersand - A trusted, independent legal news provider bringing quality news and information on all legal cases and lawsuits filed in United States of America to its readers since 2002.Over 250,000 legal help requests including Securities Fraud Cases have been forwarded to lawyers all across to the country.WASHINGTON - The newest intrigue in corporate America, the apparent backdating of stock options to boost top executives' compensation, is rapidly taking on the dimensions of a major scandal.The number of public companies under investigation by the Securities and Exchange Commission or federal prosecutors has grown to more than 30, and executives at several companies have been fired.Q: If an employee is under investigation by a supervisor and the supervisor has a personal grudge against the employee, is that something that an Inspector General (IG) can investigate?



In some instances, shareholders are suing the companies, their top officials and directors, alleging manipulation to enrich executives at the expense of the bottom line.The flock of company executives and directors being ousted, he added, "increases the likelihood that somebody's going to be prosecuted." At issue is whether company insiders manipulated the timing of stock option grants to bring big payoffs to executives by improperly backdating the grants to coincide with low points in stock prices.As first noted in a series of groundbreaking articles in the Wall Street Journal , these patterns of almost too-good-to-be-true timing took place in the late 1990s and early years of this century.Brocade, based in San Jose, Calif., is a data storage networking company with 1,300 employees.

In a 12-page affidavit filed with the criminal complaint, a Federal Bureau of Investigation special agent alleged that Mr. Jensen schemed to grant employees "valuable in-the-money stock options, while hiding the true nature and value of the stock option grants from the company's board, shareholders, auditors, the public and the Securities and Exchange Commission." Offering stock options to potential employees is not illegal.

Was it sloppy bookkeeping and confusion, or an intent to deceive shareholders for monetary gain?



Backdating investigation comments


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