Wednesday, March 07, 2007

9/11 changed everything

More revelations about the financial opportunism that arose after the 9/11 attacks, from the Wall Street Journal (subs. req'd) --

Amid the stock-market swoon that followed the Sept. 11, 2001, terrorist attacks, dozens of companies granted stock options to top executives or other employees. Now, some of those companies are saying the grants were in fact made weeks later -- and backdated.

The disclosures are the latest wrinkle in a backdating scandal that involves more than 140 companies and has resulted in more than 70 firings or resignations of corporate officials. The new information suggests some executives profited from the market's plunge following Sept. 11 by manipulating options grant dates.

An apparent surge in stock options issued to executives had been noticed for the October 2001 period, which at the time was maybe justified as way to motivate the suits with potentially tough times for corporations ahead. But it's now evident that the options were in fact granted later and backdated to the trough of the crash to maximize their value. Amongst the companies offering excuses --

A spokesman for Take-Two [the video game maker] says the company recently repriced the Oct. 1 [2001] grants along with a number of others as it corrected its books due to the widespread backdating. The spokesman says the company doesn't have sufficient information to know whether the wrongly dated Oct. 1 options were related to the Sept. 11 attacks, but he notes that Take-Two in October 2001 released a major new product, Grand Theft Auto III, the type of event for which it typically awards extra compensation.

Grand Theft Auto, indeed.

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