As highlighted by Delaware courts, it is the intent with which these actions are taken that causes them to be in bad faith, thus opening the doors to director liability.
This element of intent is also present when other backdating techniques are employed.
Be it internal or not, the primary goal of an inquiry is to determine whether, in fact, backdating has occurred.
Depending on both the factual situation and the budget, the early stages of an inquiry may involve the employment of forensic accountants, as well as the production of a statistical analysis outlining the more suspect grants.
While conclusive evidence has yet to be reported, the study highlights the fact that the opportunity was present.
Inquiries Following the significant amount of press surrounding backdating cases, some companies are starting to conduct internal inquiries into their own option granting practices.
Kreinberg was also forced to pay .4 million in order to settle civil fraud charges.
S., the Canadian Securities Administrators (CSA) released a staff notice, which provides directors with certain guidelines intended to reduce the risk of non-compliance with securities legislation.
These guidelines include, among other points, (i) the establishment of a compensation committee; and (ii) the adopting of policies regarding corporate disclosure, insiders and "black-out" periods around earning announcements.
As opposed to an "the money" option holds an intrinsic value; there is already a built-in profit at the time of the grant.
Options backdating contravenes the very nature and purpose of stock option grants.
The situation is similar for Comverse's former general counsel as well as former CEO, Jacob Alexander.