Backdating of executive stock options
Eugene Soltes was flipping through television channels late one night in 2008 when he came across the MSNBC reality show/documentary program, “Lockup,” which featured interviews with felons in prisons across the U. The inmates described their lives and circumstances — such as financial troubles, drug addiction and gang affiliation — that led to their brutal and violent crimes.
“With the charities he duped — he sees that these funds only had a lot of money because of the false returns they made earlier.
(Academics at 60 business schools around the world now use the case study in their classes.) Richards’ case history compelled Soltes to begin a quest to postulate theories about why white-collar criminals “did it.” He continued in earnest to correspond and visit with more than four dozen of the most senior executives who oversaw some of the most significant corporate failures in history, including Bernie Madoff; Andrew Fastow, Enron’s former chief financial officer; Allen Stanford, former chairman and CEO of the Stanford Financial Group; Sam Waskal, the former CEO of Im Clone Systems; and Dennis Kozlowski, former CEO of Tyco.
Infamous Ponzi schemer Bernard Madoff “is the ultimate rationalizer,” says Eugene Soltes, the Jakurski Family Associate Professor of Business Administration at Harvard Business School and author of “Why They Do it: Inside the Mind of the White-Collar Criminal.” Soltes has interviewed Madoff for several years — and continues to interview him — to try to answer the question in the title of Soltes’ book.
“This is nothing more than a timing issue,” Richards was quoted in Soltes’ book. 30, 2000, CA prematurely recognized more than .3 billion in revenue from at least 363 software contracts that CA, its customer or both parties hadn’t yet executed, in violation of Generally Accepted Accounting Principles.
“I didn’t feel that I was doing anything wrong.” However, the Securities and Exchange Commission did. In 2006, Richards was sentenced to seven years in jail. Some of the students in Soltes’ classes who studied the Stephen Richards’ case, many who are already business people, harshly criticized Richards for the ease in which he’d succumbed to institutional and market pressures.