Fifty-two companies currently under criminal investigation. Moreover, the company avoids having to expense the options as current compensation, thus increasing earnings in the near term.
As a consequence, the option is immediately profitable, or “in the money,” to the option holder.
Without admitting or denying the allegations, United Health agreed to settle charges that it violated the reporting, books and records, and internal controls provisions of the federal securities laws.
22, 2008 — The Securities and Exchange Commission today filed a civil injunctive action against United Health Group Inc., a Minnetonka, Minn., health insurance company, alleging that it engaged in a scheme to backdate stock options.
Under previous regulations, corporations could wait 45 days or, in some cases, over a year to report options, thus providing ample time for backdating.
Other similar practices are being reviewed by government officials as well.
But how does that relate to hiring prostitutes and drugging customers without their knowledge?