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Altera to Restate Financials due to Stock Option Backdating

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At a glance:

Chip maker Altera announced it would recalculate its financial statements for the past ten years, to correct any disrepancies due to stock option dating. 
 
Backdating options to dates when prices were lower is only legal if it is disclosed and accounted for.  
 
Over 50 US companies are now being investigated, or are investigating themselves, to clear up any issues with their stock options. 
 
Since passage of the Sarbanes-Oxley law in 2002, the practice of backdating has been curtailed, but many companies are still dealing with pre-2002 options.

Altera Backpedals on Backdating

MSNBC - 6/26/2006 5:20 PM

In a classic understatement, programmable-chip-maker Altera said it would have to restate 10 years of financial statements because it improperly accounted for stock-based compensation costs due to backdating. According to the company, the restatements meant that it likely had a material weakness in its controls over financial reporting. Gee, you think?
 
In stock option backdating, a company unethically enriches its executives by changing the date at which their stock options were issued, maximizing the increase between their issue price and the stock's current price. It's apparently not illegal to do so, though both the Securities and Exchange Commission and the Justice Department are investigating dozens of companies.
 
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