Backdating of Stock Options - Not Necessarily Illegal

By now, you've heard of dozens and dozens of companies that have been cited as being involved in the "backdating of stock options" scandal. However, the backdating of stock options may not even be illegal, as long as certain conditions apply, such as full disclosure to the shareholders, no forging of documents, etc. For a great write-up on the stock option backdating issue, check out the article by Erik Lie at the University of Iowa:

http://www.biz.uiowa.edu/faculty/elie/backdating.htm