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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: UncleBigs who wrote (66263)	7/17/2006 2:13:11 PM
From: Marc Hyman	Read Replies (1) \| Respond to of 110194

Option backdating is illegal. bloomberg.com; Read it again. Backdating in itself was neither illegal nor fraud. The fraud was in that the "company failed to account for the ``positive difference in the stock price'' as a compensation cost and so understated expenses by about $90 million". // marc

To: UncleBigs who wrote (66263)	7/17/2006 7:37:27 PM
From: XBrit	Respond to of 110194

"The company's stock administrator then "looked back at the market price of Peregrine's stock between the two quarterly board meetings, to find the lowest price at which Peregrine's stock had traded", the SEC said in its suit. "That's where Peregrine set the strike, or exercise, price of the options. The company failed to account for the "positive difference in the stock price" as a compensation cost and so understated expenses by about $90 million, according to the SEC." If I read that correctly, it was the act of not reporting or accounting for the hidden compensation that was the fraud. If a company chooses to reward its execs by giving them options at any random sub-market price, I believe that's legal as long as it's accounted for and reported as compensation.