Back dating option stock

Basically, a stock option is a contract right to purchase an amount of stock at a set price for a period of time.For instance, if a stock was worth a share, a stock option may grant an option holder the right to purchase

Basically, a stock option is a contract right to purchase an amount of stock at a set price for a period of time.For instance, if a stock was worth $10 a share, a stock option may grant an option holder the right to purchase $1,000 shares at $10 a share for a period of 5 years.Anderson settled his case, but Heinen is still on the hook and expects to go to trial sometime next year.Mather, Anderson and Heinen, through their lawyers, have strenuously denied wrongdoing.

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Basically, a stock option is a contract right to purchase an amount of stock at a set price for a period of time.

For instance, if a stock was worth $10 a share, a stock option may grant an option holder the right to purchase $1,000 shares at $10 a share for a period of 5 years.

Anderson settled his case, but Heinen is still on the hook and expects to go to trial sometime next year.

Mather, Anderson and Heinen, through their lawyers, have strenuously denied wrongdoing.

If the stock increased to $11 a share, the holder could exercise the option, pay $10/share to acquire the stock, then turn around and sell it for $11/share, earning $1/share in profit ($1,000 in total).

If the stock dropped below $10/share, the stock would be "under water"; therefore, the option would not be exercised, since the stock price is lower than the cost of exercising the option.

Clearly, the Enron trials have not closed the book on corporate fraud.

A new boardroom scandal is roiling Wall Street: stock options backdating.

,000 shares at a share for a period of 5 years.Anderson settled his case, but Heinen is still on the hook and expects to go to trial sometime next year.Mather, Anderson and Heinen, through their lawyers, have strenuously denied wrongdoing.

Apple has essentially blamed former chief financial officer Fred Anderson and former general counsel and board secretary Nancy Heinen, both of whom are no longer with the company.

Take this example, from The Wall Street Journal, which began investigating the practice last fall: "Suppose an executive gets 100,000 options on a day when the stock is at .

Exercising them after it has reached would bring a profit of times 100,000, or million.

But Apple makes clear that Jobs was directly involved in some instances of backdating.

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.

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SAN FRANCISCO (Market Watch) -- Steve Jobs has managed to revolutionize both the consumer electronics and entertainment industries, but the onetime wunderkind can't seem to shake the stigma of the stock-options backdating scandal that enveloped Silicon Valley in recent years.

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