Backdating digital river
The Alberta Securities Commission has no public investigation ongoing against Ensign Energy Services.Lindsay Tedds researches stock option backdating at the University of Victoria.The option gives the employee the right to buy a certain number of shares in the company at a set price, called the strike price.
Stock options are a very popular employee and executive incentive.In Canada the options cannot be granted at a lower price than where the shares were trading the day before they were granted.Option backdating is the practice of changing the date that a stock option was granted to make the strike price lower and the option more valuable.Hart then enlisted Ernst and Young to conduct a forensic accounting investigation.According to an affidavit filed in late December 2013 by a member of Ensign’s board of directors, Hart found that Ensign’s stock option granting process was flawed between the period of 1993 until August 2006.
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Backdating came to the attention of the media and shareholders in the mid-2000s after a number of high profile companies, including the former Research in Motion, settled allegations of backdating.