Interlocking Boards Spread Options Scandal: Study

Law360, New York (January 22, 2007, 12:00 AM EST) -- A company was more likely to illegally backdate options if it had a director that sat on the board of another company that had already backdated options, according to a recent study.

Interlocking boards, as they are known, accounted for almost one-fourth of the unconditional probability that a firm would initiate the practice of backdating, added the study, which was authored by Portland State University finance professor John M. Bizjak, University of Utah finance professor Michael L. Lemmon and Utah graduate student Ryan J. Whitby....
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