Wednesday, July 26, 2006

Backdating and Futuredating

Backdating Stock options is illegal, simply another form of Insider Trading. A NYTimes article today states Backdating Stock options cannot really be stopped. Pure trash! It is one of the simplest forms of Stock fraud to prevent, it only taking a realistic law to be introduced. What type of law? I can give a rough sketch:

Stock options can only be granted the following Year to any performance, and must be issued at the highest Price of said Stock the previous year of performance. No Stock option may be exercised by any Employee while he is employed, and must be exercised within 30 Workdays of his discontinuance of employment.

Employees granted Stock options will understand that longterm growth and Profitability must be maintained, for the Employee to benefit from Stock options. Fraud is automatically suspended, because the highest Price of the Stock in the performance Year is publicly known. Choice of Date of Retirement is still available to the Employee, but individual Stockholding is curtailed as he must finance acquisition of the Stock within a Set timeframe. The Corporation gets what it purportedly wants, performance, while Stockholders and Investors limit the excess of Executives granting themselves vast wealth without referral and deferment to Stockholders. lgl

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