Does Late Form 4 Signal Stock Option Backdating?

Lora Bentley

Months after many brushed off the revelation of widespread option back-dating as something that would just blow over, at least 100 companies have filed financial restatements as the result of internal investigations, high level executives have left their companies and/or face criminal charges, and the Securities and Exchange Commission has issued new rules on executive pay disclosure.


And the beat goes on. A MarketWatch blog cites research from Glass Lewis that says the failure of such firms as Hansen Natural and O'Reilly Automotive to file the required Form 4 within two weeks of stock option grant dates, coupled with "a material increase" in the prices of the stocks between the dates of the grants and the dates of the Form 4 filings, may indicate illegal post-Sarbox stock option backdating.


The Glass Lewis research is yet another indication that backdating was more widespread than anyone imagined, that there's more than one way to uncover it, and that we probably still haven't heard the last of it.

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