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Legality Of Spring-Loading Still Up In The Air

Law360 (July 14, 2006, 12:00 AM EDT) -- Securities and Exchange Commission Chairman Christopher Cox announced Wednesday that he wants upcoming SEC guidance to address both stock options backdating and the even more legally ambiguous spring-loading.

The announcement comes as the SEC and other government agencies have been targeting companies for investigations into options backdating at a sprinter’s pace, with at least 60 companies currently under investigation.

“When it comes to backdating, at least in practice, most people think it’s illegal,” said Erik Lie, an associate professor of finance at the University of Iowa....
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