Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Tuesday, April 29, 2014

Fuerman on Stock Option Backdating

Ross D. Fuerman has posted The Stock Option Backdating Litigation: An Empirical Investigation on SSRN with the following abstract:

This paper adds to the stock option backdating literature by examining the litigation it spawned. The stock option backdating litigation ("SOBL"), compared to the contemporaneous typical financial reporting litigation, is negatively associated with auditor defendants, bankruptcy, and the amount of the aggregate settlements paid directly to the shareholders. It is positively associated with the computer industry, stock option backdating restatements, and US companies. In comparing the derivative lawsuit-only SOBL to the SOBL with related securities class actions, it was found that the derivative lawsuit-only SOBL is negatively associated with auditor defendants, fraud, revenue restatements, and the forced departure of executives implicated in stock option backdating. In the final analysis – of the factors associated with the amount of the SOBL securities class action settlement with the shareholders – the forced departure of executives implicated in stock option backdating was positively associated with the settlement amount. The results suggest that securities class actions may be more effective than derivative lawsuits in deterring fraud, and that their effectiveness is positively associated with their successful prosecution.

| Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference Fuerman on Stock Option Backdating:


Post a comment