Comments on: Backdating stock options is a crime? Go figure.

By: BRT1

BRT1 — Sun, 23 Sep 2007 03:58:53 +0000

One thing that would be really helpful for all legal analysis of these matters is if they tried to understand the various aspects of cash vs non cash expenses. “tagging corporate executives with the responsibility of actually knowing enough about accurate accounting to be able to actually accurately account” – this will never be true for non cash expenses. EVER. And if it is- I can guarantee you one thing- that company/executive will be gone in a matter of years, because the tedious and non beneficial aspects of counting depreciation and stock options expenses has no material affect on that company, irrespective of whether or not these things are material to shareholders. It seems like many legal bloggers think CEOs do nothing but sit around and pick stock grant dates. Is that what you want Steve Jobs to focus on, because you seem to be advocating it. I doubt he is an accountant or non cash expense “hawk”.

By: Michael R. Bernstein

Michael R. Bernstein — Sun, 12 Aug 2007 23:43:41 +0000

“Donâ€™t lie to investors. Donâ€™t lie to the government. Donâ€™t lie to the corporate auditors/accountants. Follow the rules. Donâ€™t break the law.”

I think this is a bit harsh. Breaking ‘the rules’ is frequently a good idea. I would end it as “Only break the rules if you aren’t breaking the law.”

By: Elizabeth Nowicki

Elizabeth Nowicki — Thu, 09 Aug 2007 23:35:40 +0000

Jim and David, good comments.
Jim, I wonder whether the government would ever go after Steve Jobs. As to investors, government, auditors, and accountants all knowing about the backdating, fortunately (for purposes of your query), they did not. Even if the auditors knew and even if the government suspected, the investors didn’t know as a practical matter b/c all they knew was that they voted on an option plan that did not allow for backdating. Right?
Good thoughts, though.

By: Jim Lebeau

Jim Lebeau — Thu, 09 Aug 2007 22:05:00 +0000

My law, right or wrong! It is not clear to me wether or not backdating is still wrong if the the investors, government, auditors and accountants were all told that that is what was going on. Will Steve Jobs be found guilty too? Should there be a balance between legality and morality when they do not agree? Or should legality triumph over morality?

By: David Zaring

David Zaring — Wed, 08 Aug 2007 19:32:55 +0000

Yes on the Rule 29 – though that’s always the deal, right? The judge could set aside sua sponte – at least in the civil system that I know. I confess this is the criminal system that I don’t know.