The backdated stock option scandal is one of those stories that continues to have legs. Last week two news stories appeared. The first was the publication of IR-2007-30, the announcement by the IRS of its initiative aimed to provide tax relief for those for rank-and-file employees affected by their companies’ issuance of backdated and other mispriced stock options.
The IRS will be offering employers the opportunity for them to satisfy the tax obligations of these employees. This program, however, will not be available for backdated options exercised by most corporate executives or other insiders. Only fair, right?
The second and far more interesting story to me (and other CSI fans) was the post in CFO Blog by Marie Leone, Senior Editor of CFO.com, Faster Than a Speeding 8-K. Ms. Leone reports on a speech by SEC Chairman Christopher Cox before members of the Practicing Law Institute on how the Enforcement Division used online reporting of stock option data to uncover the billions of dollars of backdates stock option awards. Ms. Leone also provides the interesting backstory and link to Chairman Cox’s speech.
Is there an ERISA connection? Well, the Department of Labor will require that Form 5500 be filed electronically for plan years beginning on and after January 1, 2008.