![]() These academics have studied thousands of option awards across a diverse group of industries.Īnd independent research firm Gradient Analytics Inc., which focuses on forensic accounting and executive behavior, has said in a research report that there was a “notable risk” of stock option backdating at EMC.īetween 19, 36.2 million options were granted to EMC executives and about 48 percent happened around the time of share price reversals, Gradient said in an August research note to its clients, who include many hedge fund managers.Īlmost 30 percent of the grants came within 5 percent of quarterly share price lows, Gradient said. academics, who declined to be named, told Reuters that EMC had option grants with price patterns that could lead to suspicion of some kind of manipulation. ![]() The company declined to answer questions about the program following several e-mail and telephone requests over the past month. The SEC and the DOJ declined to comment on EMC.ĮMC Spokesman Greg Eden said the company has no issues with its stock options program. More than 170 companies have faced investigations because of suspicions that luck might not be the only reason option grants were awarded routinely during a low point in their stock prices, only to see shares rise in the days and weeks afterward. Securities and Exchange Commission and the U.S. ![]() There has been no sign that Hopkinton, Massachusetts-based EMC has run into trouble with regulators over the program, even though this kind of good fortune put other companies in the sights of the U.S. By year-end, the stock was 17 percent higher than the October 19 grant’s exercise price. The October grant landed on the sixth-lowest closing stock price for 2001. The award also was timed to near perfection. The award was remarkable on two fronts: Top named executives received more options on that October day than from 1996 to 2000 combined, according to EMC proxy disclosures. Two days after EMC reported its first quarterly loss in 12 years, five top officials, on October 19, got 6.3 million options with an exercise price of $11.51, that day’s closing price. And EMC’s stock option committee found it. The company’s explosive revenue growth had stalled and the world’s financial markets remained jittery in the aftermath of the September 11 attacks on the United States.īut there was a sweet spot amid that market chaos. EMC.N, the world's largest data-storage company, were in a tailspin, near the bottom of a 79 percent plunge that year. NEW YORK (Reuters) - In October 2001, shares of EMC Corp.
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