Backdating options legal hong kong dating advertisement
All stemming from the practice known as “options backdating.” Options backdating occurs when a company issues stock options on one date, but reports in its financials an earlier issue date to create a “strike” or exercise price equal to the earlier date’s lower price.Another consequence is that the company underrepresents the real nature of an executive’s compensation, perpetuating the myth that options are performance-based incentive compensation.Unfortunately, there is no simple or straight forward answer to this and it comes down to how comfortable the lawyer will be defending his position in agreeing to backdate the document if his judgment was wrong and the authorities challenge the document, possibly in a criminal complaint against the client.What confirmation of the earlier agreement did the client or the company for which the client (and lawyer) works provide?
The difficult question for a lawyer to answer is to what extent does he have to enquire into the veracity of his client’s statement that the document “is just recording an earlier agreement”?
The backdating problem was first highlighted by Professor Erik Lie of the University of Iowa, who published his initial study in 2004.
Professor Lie concluded that the robust profitability of so many options was statistically impossible absent some artificial influence such as backdating.
Does he need to check to see whether that was actually the case or can he take an ostrich-like position and put his head in the sand and not ask any questions?
Is there an obligation on the lawyer to make at least reasonable endeavour’s to confirm that he is being told the truth?