The Corpus Callosum

Crime, in Perspective

According
to the Corporate Crime Reporter, at least 257
companies have “backdating problems.”  That refers to the
shady practice of backdating stock options, resulting in larger payouts
to those who receive compensation in the form of stock options.
 But it isn’t merely “shady:”

CORPORATE
CRIME REPORTER

At
Least 257 Companies Have Options Backdating Problems

21 Corporate Crime Reporter
14, March 26, 2007

At least 257 public companies have option backdating problems.

That’s according to a report released today by Glass Lewis,
the Denver, Colorado-based shareholder services and research firm.

The report found that to date, the options backdating scandal has
resulted in an unadjusted initial decline in market value of $5.5
billion and the recognition of at least $12.3 billion in additional
pre-tax compensation expenses.

At least 85 executives and directors at 46 companies have been fired,
demoted or resigned, the report found.

The report also found that the scandal has resulted in 252 internal
investigations, 128 SEC investigations, 58 Department of Justice
investigations, 129 shareholder lawsuits, and six criminal cases.

A big chunk of the cases are in the computer industry –
including 43 in software and programming and 37 in semiconductors.


Perhaps more enlightening is their report on the incidence of public
corruption cases: href="http://www.corporatecrimereporter.com/corruptreport.pdf">Public
Corruption in the United States (PDF).  They
calculated the rate of cases for public corruption per 100,000 people,
for each State.  Mississippi was worst, with 7.48 cases per
year per 100,000 people.

Want to guess the rate in Washington DC? 79.33 – more than ten times
the rate in the worst State.

There were 453 cases in a ten-year period, almost one per week!