Devoted to Corporate Attorneys, Corporate Lawyers, and Corporate Counsel

According to this post, Backdating Options from the Business Law Prof Blog, the "backdating options scandal continues to grow." Looks like "over 2,000 firms may be involved." The post notes: "Lawyers, who should have sniffed out the practice (or may have even participated), are now cashing in as law firms are racking up the billing hours defending firms that may have undertaken the practice."

Less hard-hitting but just as noteworthy is a post from the Wall Street Journal's Law Blog. Check out Backdating: Lawyers' Latest Full Employment Act. The title speaks for itself, doesn't it?

Houston's Clear Thinkers has a different take. Check out What's driving the latest business scandal?, which addresses how the media is handling the scandal.

Who's looking at this issue from the shareholders' perspective? Institutional Shareholder Services is. ISS has dedicated a section of its website to the issue, calling it the ISS Options Backdating Information Center. (Hat tip to Truth on the Market.)

In "Spring Loaded" Compensatory Stock Options, the Business Law Prof Blog has a post about another practice involving stock options called "'sping loaded' executive options." Are these illegal? That's the question addressed by the post. For an interesting take on the issue, read it.

According to this Reuters article, Take-Two, CNET face more stock option issues, Take-Two Interactive Software Inc. and CNET Networks Inc. are in a bit of a jam with the SEC. Take-Two, which produces and sells the "Grand Theft Auto" video game series, disclosed that the SEC has "launched an informal investigation into its stock options policies dating back to 1997." CNET, in turn, disclosed that it "would likely restate results to correct errors related to its stock-option accounting."

Finally,the smallbizpipeline has a great article about the options scandal. According to the article, written by J. Nicholas Hoover, approximately 60 companies have been "caught up in this latest American corporate scandal." Most of those are technology companies. The article covers an issue that has received little, if any, attention: Whether the scandal could affect the customers of those companies. For this interesting perspective on the scandal, read Options Pricing Scandal Could Hit Tech Vendors' Customers to learn more.

• that competition may be being impeded in a variety of ways;
• that access to fungible clearing arrangements is necessary for effectie competition and therefore must be assured on a non-discriminatory basis;
• that CCP services could - and probably should - operate in a competitive environment provided issues of interoperability are overcome;
• that vertical integration may result in foreclosure at all levels of the value chain and therefore lead to welfare losses;

Last week, Apple announced that "it found irregularities in the way it issued stock option grants." This week, the company announced that two lawsuits have been filed against it and current and former officers and directors regarding stock option grants. That didn't take long, did it? Read Apple Sued Over Stock Options Grants to learn more.

In other securities news coming out of California, the Ninth Circuit has thrown out a securities fraud case against AOL. California Teachers Retirement System v. AOL Time Warner, Inc. is a class action suit alleging a scheme to commit securities fraud by overstating the reported revenues of an Internet company, Homestore.com. Homestore eventually restated its revenues, resulting in a decrease in revenues of more than $170 million and corresponding declines in Homestore’s stock value. The district court dismissed the securities claims.  The Ninth Circuit affirmed.

The case tests the scope of the Supreme Court's decision in Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., which holds that § 10(b) of the '34 Act does not allow recovery for aiding and abetting liability. The Ninth Circuit, not known for its generousity toward securities plaintiffs, affirmed the decision below.  It held: "Although we hold that the scope of § 10(b) includes deceptive conduct in furtherance of a 'scheme to defraud,' when all elements of § 10(b) are otherwise satisfied, we conclude that Plaintiff’s complaint insufficiently alleged that Defendants were primary violators of § 10(b) based on their conduct in the furtherance of the scheme."