With hundreds of companies under investigation in the ongoing stock option backdating scandal and billions in shareholder wealth up in smoke as a result, one would think the seemingly straightforward, inexpensive solution of time servers—computers to track and confirm when an option is granted—would catch on.
It isn’t, say auditors, attorneys, and even time-server makers themselves. The reasons are complicated.
Time servers are computers that gather time accurate to less than a millionth of a second from Global Position System satellites or contain ultra-accurate atomic clocks themselves. Linked to a corporate network, time servers could theoretically be an easy means for confirming the actual file-create date of, say, an options grant. Grantors could backdate away, but the timestamps wouldn’t lie (assuming a user can be blocked from modifying his or her computer clock or otherwise subvert... To get the full story, subscribe now.
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