• February 2020
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Backdating of stock options

The date prior to the grant date, which the board of directors approves to reflect a fair market value per share that was lower than it was on the approval date — the result being a lower exercise price. This practice is not encouraged since it subjects a company to potential charges of civil and criminal misrepresentation and securities fraud. Adverse tax consequences under Section 409A and disqualification of stock options are other potential ramifications.