Of all the parties who could have been seriously singed in the options back dating law enforcement conflagration ignited by Iowa academic Erik Lie, auditors were left pretty much unscathed.How did Horowitz, according to his account, avoid jail?Here’s law firm Mc Dermott Will & Emery in August 2006: Potential Claims Against Auditors Auditing firms are faced with a similar dilemma.Often, it is the auditing firms that provide advice concerning issuance of stock options and related tax ramifications.
“Why I Did Not Go To Jail” Michelle (note: her name has been changed) comprehensively understood software accounting, business models, and best practices, and she was beloved by Wall Street in no small part due to her honest and straightforward reporting of her previous company’s business.
Former US Securities and Exchange Commission (SEC) Chairman Arthur Levitt stated that backdating “represents the ultimate in greed. It is ripping off shareholders in an unconscionable way.” In the latest development in the developing scandal, federal authorities filed “the first of what could be a barrage of criminal and civil charges” against company executives for allegedly manipulating stock option grants to make them more lucrative.
Fraudulent actions to increase executive compensation can and do hurt investors.
Pw C was also named as a defendant when Mercury Interactive executives were prosecuted for the backdating issues.
Judge Jeremy Fogel dismissed the case against Pw C contending that the plaintiffs had not provided proof supporting a “strong inference of knowledge or recklessness” on Pw C’s part.