Glass lewis backdating


However, said Lipman, “if both sides [don’t have] equal knowledge, I think it can be a violation of insider trading rules.” For example, if a chief executive officer knows positive, undisclosed information will be released, but the compensation committee does not, that could be a violation.Given the confusion and uncertainty around this practice, it’s easy to see why the SEC is targeting backdating cases first, notes Todd Fernandez, a senior research analyst at Glass Lewis who spoke with before today’s hearing.” asked Atkins, who added that it is difficult to predict the stock price change of an upcoming event and the future direction of that stock over multiple years until the options recipient is vested in those options.

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But a company suspected of spring-loading cannot be said to have that advantage, and executives can argue, truthfully, that there is no way to know for certain how the market will react to impending news.The list of options backdating lawsuits (here) has been updated today.The number of options timing related shareholders’ derivative suits now stands at 92.Speaking before a conference sponsored by the International Corporate Governance Network, Atkins asked, “Isn’t the grant a product of the exercise of business judgment by the board?

” He explained that in deciding to grant options before positive news, the directors may determine that they can grant fewer options and the recipient could get the same economic effect when the stock price rises. Why isn’t that decision in the best interests of the shareholders?

Spring-loading is the practice of scheduling an option grant before the release of positive corporate news, a move that anticipates a rise in the stock price and attempts to give a maximum boost to the value of the stock option.