Clorox To Face Shareholder Derivative Action

Law360, New York (October 20, 2006, 12:00 AM EDT) -- A shareholder lawsuit has been filed against certain officers and directors of Clorox Co. for allegedly manipulating option grants.

The suit alleges that backdating options violates state laws governing executive fiduciary duties, federal laws governing securities and taxation, and even the company’s internal documents.

Moreover, companies that backdate options under-report compensation expenses and receive lower payments, the suit said.

“[It] permits directors, officers and/or executives to unjustifiably reap millions and billions of dollars which should be disgorged and returned to the corporate coffers thereby contributing to...
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