Backdating derivative


The stock option backdating litigation is unusual if not unique as each litigation could conceivably have been brought as a stand-alone derivative lawsuit or as a parallel litigation (with both a derivative lawsuit and a private securities class action).Which genre of litigation was better at deterring executive fraud? The parallel litigation, which includes private securities class actions, is positively associated with the forced departure of stock option backdating fraudster executives.Of the 151 stock option backdating litigation observations, 53 were parallel (they included both private securities class actions and derivative lawsuits) and 98 were derivative-only.

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We all know that securities class action suits are highly predictable, high-dollar exposure for directors and officers of public companies.20%, the fraudster executives were forced to depart their companies.In multiple logistic regression, which included control variables, the difference was significant at a probability value of .003.The suits are styled as “derivative” because the shareholders aren’t bringing the suits directly.

Rather, the shareholder is bringing the suit the corporation that is being injured by the reported misconduct of the directors and officers.

In all of the derivative lawsuits fees were paid to the plaintiff attorneys.



Backdating derivative comments


  • The Path of Corporate Law Of Options Backdating, Derivative Suits. profil de paulette60

    paulette60

    This article examines a cornerstone doctrine of corporate law, the business judgment rule, in the light of various corrupt practices in large public companies — principally the options backdating scandal. It finds that the rule is an impediment to actions such as shareholder derivative suits that can deter this improper conduct.…
  • Securities Class Actions Compared to Derivative Lawsuits Evidence. profil de paulette60

    paulette60

    Mar 11, 2016. In this study, Securities Class Actions Compared to Derivative Lawsuits Evidence from the Stock Option Backdating Litigation on their Relative Disciplining of Fraudster Executives, 35% of the 151 stock option backdating litigation observations included private securities class actions in addition.…
  • Press Release Former UnitedHealth Group CEO/Chairman Settles. profil de paulette60

    paulette60

    Dec 6, 2007. Former UnitedHealth Group CEO/Chairman Settles Stock Options Backdating Case for $468 Million. terms of his separate settlement with the company, also announced today, resolving employment claims and shareholder derivative lawsuits filed against McGuire in state and federal courts in Minnesota.…