We also appreciate the comments of Alan Jagolinzer, Thomas Lys, and Hayagreeva Rao.Fifty-two companies currently under criminal investigation. Moreover, the company avoids having to expense the options as current compensation, thus increasing earnings in the near term.“It falls on them because the statements were materially false at a time they were representing those statements were accurate,” says Mark Fickes, partner at Braun Hagey & Borden and former lead trial counsel for the SEC in the Maxim/Jasper trial.Jasper signed all of Maxim’s filings with the SEC at that time.
This discussion comment focuses on several fundamental issues that confront researchers examining the backdating scandal and other related decisions.Other similar practices are being reviewed by government officials as well. Before SOX, we find evidence that some exercises were backdated to days with low stock prices.The investigation "found that CEO Steve Jobs was aware or recommended the selection of some favorable grant dates." The committee hastens to add that Jobs "did not receive or financially benefit from these grants or appreciate the accounting implications." In other words, he didn't recommend backdating his own option grants.Still, given that (a) backdating helps make earnings look better than they are; and (b) Jobs is a huge shareholder of Apple (10.12 million shares, as of last April), how could he not benefit from this behavior? Jobs recommended some backdating dates for other employees.