Executives Still Play Options Backdating Game: Study

Law360, New York (January 27, 2006, 12:00 AM EST) -- The Sarbanes-Oxley Act has done little to deter corporate executives from manipulating stock options, according to a new study by two University of Michigan professors.

Egregious discrepancies in reporting option grants have gone largely unnoticed since the act was passed in Congress in 2002, the report found.

Its authors, M. P. Narayanan and H. Nejat Seyhun, who are business professors of finance, argue that strategic market timing and late reporting are the chief methods of stock-option abuse.

It’s a clever game, they posit, with two major...
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