Apple corporation stock option backdating scandal

Posted by / 21-Nov-2019 08:14

Apple corporation stock option backdating scandal

This process makes the granted option "in the money" and of value to the holder.

In the modern business world, the Sarbanes-Oxley Act has all but eliminated fraudulent options backdating by requiring companies to report all options issuances within 2 days of the date of issue.The problem with this practice, according to the SEC, was that stock option backdating, while difficult to prove, could be considered a criminal act.One of the larger backdating scandals occurred at Brocade Communications, a data storage company.This adjustment to the filing window came with the Sarbanes-Oxley legislation.After the two-day reporting rule went into effect, the SEC found numerous companies were still backdating options in violation of the legislation.

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Options backdating is the process of granting an option that is dated prior to the actual issuances of the option.