SEC probes companies stock options grants.

**grapes** Mon May 22, 2006 7:04 pm

SEC probes companies stock options grants.
Recently SEC is cracking the practise of back dating the options granting date issue. The following is a link to a yahoo financial news.

http://biz.yahoo.com/ap/060522/options_dating.html?.v=2

Blast or any other guru, can you comment on it as how the game is played? Is there any possibility of value created here? For example, MFE reported earning exceeding the expection of Wall Street recently. However, the stock does no go up significantly. What is more, with recent market going down and the news of SEC probing, it went down to even bellow the price when good news of earning is out. Put in another word, the market did not give any credit to the good news of earning.

**blast_investor** Mon May 22, 2006 9:13 pm

Re: SEC probes companies stock options grants.
This is simply a fraud played by company management.

this is also called "back fitting". When management is offered option, the excercise price should be market price of that offering date. But company management may find the lowest of price in history and claimed that lowest price was excercise price for CEO.

Wall Street Journal recently published a long article on that.

grapes wrote: Recently SEC is cracking the practise of back dating the options granting date issue. The following is a link to a yahoo financial news.

http://biz.yahoo.com/ap/060522/options_dating.html?.v=2

Blast or any other guru, can you comment on it as how the game is played? Is there any possibility of value created here? For example, MFE reported earning exceeding the expection of Wall Street recently. However, the stock does no go up significantly. What is more, with recent market going down and the news of SEC probing, it went down to even bellow the price when good news of earning is out. Put in another word, the market did not give any credit to the good news of earning.