Stock Options: The Backdating Issue (CRS Report for Congress)
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| Release Date |
Revised Feb. 3, 2009 |
| Report Number |
RL33926 |
| Report Type |
Report |
| Authors |
James M. Bickley, Specialist in Public Finance; Gary Shorter, Specialist in Financial Economics |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
While undisclosed backdating of stock options is the focus of this report and the most importanttype of timing manipulation, it should be noted that there are other forms of timing manipulation,which are discussed in Appendix A. In some cases when more than one form of timingmanipulation occurs, it may be difficult to empirically separate the relative magnitude of the costto the shareholders of these different forms of manipulation, including backdating. In order to fully understand the backdating issue, this report covers the following topics:illustration of undisclosed backdating, types of stock options, growth of stock options in the1990s, the extent of timing manipulation of options, the potential costs of backdating, keylegislative and regulatory developments, gatekeepers, and potential policy options.
