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This disclosure must come no later than the end of the following trading day, effectively preventing any back-dating of option grants.
It is a phenomenon that will never rock the UK markets as it has the US ones.
Sure the accounting rules are arcane and most people don’t know them.
But if someone asks you to write down a date from a month ago on a legal document, rather than today’s date, doesn’t it give you pause?
One explanation was that options were being backdated to before major rises.
That idea broke from academia into the business mainstream in 2006, and backdating scandals swept like wildfire in 2006, involving companies as famous as Apple, Dell and Broadcom.
Protections don't just apply to big listed firms, though.
Even for privately held companies the scope to backdate an option grant is very limited indeed.If the price has fallen, you simply don't buy the share.Backdating is the practice of rewriting the agreement so that the option appears to have been granted at an earlier time when the share was even cheaper.OPINION: The former CEO of a US tech giant will have 21 long months in which to rue the day he ever heard of stock option backdating.Brocade Communications' Gregory Reyes has been sent to prison for 21 months and fined million for backdating options.When they don't they simply adopt the stock exchange's own rules.