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Options Backdating: The Statistics Of Luck

Law360 (May 4, 2007, 12:00 AM EDT) -- * Misconceptions about Backdating and Probability *

In this article, we explain why:

--some patterns of option grants that may appear extremely unlikely are actually very likely;

--the calculations presented in the March 18, 2006 Wall Street Journal article can be misleading; and

--factors that were disregarded in published probability calculations may be especially important when estimating the likelihood of grants for specific companies.

* Allegations of Backdating *

Allegations of backdating typically involve a claim of practice by which companies look back to past stock...
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