The CEO, CFO and General Counsel of Comverse Technology were charged yesterday by the SEC in a stock option scandal. The charges allege that backdating has been going on since 1991. It's the by now typical odds-defying practice: pick a date in the past when the price of your stock was lower than today and enter that date on the option grant; get a compliant or blind board to sign the deal and, voila, you're ahead a few dollars, in some case a few million dollars.
What is different about this case is that they invented employees to whom options were granted. These names were entered in a fund referred to by the name of "I. M. Fantom". Do you think that the people who cashed in on these options were not named Fantom, but had the same names as the three charged? I think that there is a very remote possibility of that happening.
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