New research (July 2006) by Eric Lie and Randall Heron found that 29.2% of companies issuing options to executives and/or directors between 19 have grant date patterns that suggest backdating or other manipulative practices (such as "spring-loading," the announcement of a grant before good news is released), and 23% of options issued to executives appear to have been backdated or spring-loaded.
The pattern was somewhat more common in technology companies, smaller companies, companies granting options to more executives and directors, and companies with higher stock price volatility.
District Court for the Northern District of California handed down the final judgment for defendant Sharlene Abrams, a week after doling out the prison sentence.
Three months later, the publisher released the results of its independent investigation into the scandal and pinned the blame squarely on Brant.
The SEC found that from 1997 to 2003, Brant granted stock options to himself and other employees and altered the records regarding when the options were granted in order to make them instantly profitable to the receiver.
Volatility is especially significant: 29% of companies with high volatility appear to have manipulated grant dates, compared to 13% of those with low volatility.
New rules under the Sarbanes-Oxley Act have reduced the practice to 10% of the companies granting options.
Nejat Seyhun of the University of Michigan for the newspaper showed that that options granting practices between 20 often failed to comply with the Sarbanes-Oxley requirement that grants of awards to executives be reported within two days of board approval (T"he Dating Game: Do Managers Designate Option Grant Dates to Increase Their Compensation? Prior research at Erik Lie at the University of Iowa found a pattern of probable options backdating in a number of companies prior to 2002.
Recording the exercise as having occurred on an earlier date when the stock price was lower would minimize the executive's income tax liability, but constitutes tax fraud.
Some examples of the types of insurance fraud that are investigated include: California and federal laws also permit the Fraud Division to pursue its cases federally.
In those instances, the crime of "insurance fraud" is usually pursued as "mail fraud," "criminal racketeering" or other federal offenses.
Federal prosecutors obtained an indictment against Abrams in 2008 for income tax evasion and aiding in the preparation of false tax returns.