Impact of backdating

The first and most important thing to note about the consequences of backdating a document is that it is potentially a criminal offence.

When we say “backdating” what we usually mean is executing a document and then dating it with an earlier date than the actual date of execution, with the intention that it should be treated as giving rise to legal rights before the actual date.

This article will attempt to provide reasons why this issue is important, why civil and criminal authorities are investigating, and why it is critical that public companies who issued options over the past...

Stock option backdating has erupted into a major corporate scandal, involving potentially hundreds of publicly-held companies, and may even ensnare Apple's icon, Steve Jobs.

Law360, New York (June 15, 2006, AM EDT) -- It is virtually impossible to pick up a newspaper these days and not see an article about the ever-growing list of companies being caught up in investigations concerning allegations of backdated stock options.

This discussion comment focuses on several fundamental issues that confront researchers examining the backdating scandal and other related decisions.That is not risk management; it is crisis management—a reactive approach aimed at limiting the damage.The authors provide a framework for actively managing reputational risk.While the focus of the Securities and Exchange Commission ("SEC") centers on improper accounting practices and disclosures, thereby violating securities laws, a major yet little explored consequence to the scandal involves potentially onerous taxes on those who received these options.Basically, a stock option is a contract right to purchase an amount of stock at a set price for a period of time.