Report Identifies Possible Executive 'Gift Loophole'

Law360, New York (February 26, 2008, 12:00 AM EST) -- A new report has pointed to circumstantial evidence that some top executives use a “gift loophole” to profit from privileged information while hiding the dishonest and potentially illegal acts under the guise of charitable donations to their own family foundations.

Finance professor David Yermack of New York University's Stern School of Business published a paper outlining these findings on Feb. 22. The paper is titled “Deduction ad absurdum: CEOs donating their own stock to their own family foundations.”

After studying 151 gifts of stock, each worth...
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