Log in or register
Share on LinkedInShare on LinkedIn

ARTICLE · 08 AUGUST 2006

Options Backdating—D&O Insurance Issues

McDermott Will & Emery
Explore more from McDermott Will & Emery

In recent months the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ) commenced investigations into the practice of backdating options awarded to directors and officers. Investigators are exploring whether certain companies backdated options to a time when the share price was lower in order to maximize the recipient’s financial benefit while preserving favorable executive compensation tax treatment.

United StatesCriminal Law
Mark Collins
Mark Collins
Author LinkedIn connections

In recent months the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ) commenced investigations into the practice of backdating options awarded to directors and officers. Investigators are exploring whether certain companies backdated options to a time when the share price was lower in order to maximize the recipient’s financial benefit while preserving favorable executive compensation tax treatment.

The practice itself may not be illegal, but the conduct surrounding the options is subject to scrutiny. Investigators are seeking answers to certain key questions: Did the company forge documents to accomplish the backdating? Did the company communicate the practice to shareholders? Did the company properly report the option grants in earnings reports? Did the company properly account for the backdated options in its tax returns?

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

Related Articles

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

See more popular content from

Article

DOJ Announces 2026 National Health Care Fraud Takedown: 455 Defendants Charged In $6.5 Billion Enforcement Action

The Department of Justice's 2026 National Health Care Fraud Takedown charged 455 defendants in connection with $6.5 billion in alleged fraud schemes, marking an unprecedented scale of enforcement action. This whole-of-government approach leverages advanced data analytics and international cooperation to combat healthcare fraud across Medicare, Medicaid, and other federal programs. The enforcement action demonstrates heightened scrutiny of providers, aggressive asset forfeiture, and a focus on cases involvin
United StatesCriminal Law
Benesch, Friedlander, Coplan & Aronoff LLP
Benesch, Friedlander, Coplan & Aronoff LLP
Article

2026 Mid-Year Update On DOJ Corporate And White Collar Enforcement

The Department of Justice has implemented its first-ever Department-wide Corporate Enforcement Policy, fundamentally reshaping how companies navigate voluntary self-disclosure, cooperation, and remediation across all criminal matters. This comprehensive mid-year analysis examines the new three-path framework, explores critical enforcement developments in FCPA, export controls, trade fraud, and healthcare, and reveals how recent resolutions signal both opportunities and heightened risks for corporate complia
United StatesCriminal Law
Sher Tremonte
Sher Tremonte
Article

Prediction Markets — Legitimate Trading Or Gambling?

The rapid expansion of online prediction markets has created a regulatory gray area where consumers can effectively wager on sporting events even in states that prohibit traditional sports betting. As platforms like Kalshi, Polymarket, and Robinhood argue their services constitute futures trading rather than gambling, state attorneys general and the CFTC are locked in legal battles over jurisdiction and consumer protection.
United StatesCriminal Law
Klemchuk
Klemchuk
Article

The State Of The World’s Whistleblower Laws, Protections, And Rewards

Whistleblower protection has evolved significantly since the UN Convention Against Corruption in 2003, yet the scope of protections and rewards varies dramatically across jurisdictions. From the robust reward systems in the United States and South Korea to the EU's protection-focused directive and emerging programs in Ghana, countries have taken vastly different approaches to encouraging and safeguarding those who expose wrongdoing.
United StatesCriminal Law
Miller Shah LLP
Miller Shah LLP