Our analysis provides new insight into how boards function and the role that they play in providing managerial oversight and determining corporate strategy.
) unearthed a handwritten note in which ACS Chairman Darwin Deason discussed the practice of always picking the lowest prices “so far” in the quarter to award stock options, The Wall Street Journal reported.
In 2009, ACS ranked #401 on the FORTUNE 500 list and employed about 74,000 people around the world who served thousands of commercial and government clients.
In February 2010, following its acquisition by Xerox, ACS was replaced by Urban Outfitters on the Standard & Poor 500 Index.
C., alleges that from 1995 to 2006, ACS engaged in a fraudulent and deceptive scheme to provide executives and other employees with undisclosed compensation.
ACS, through its former CEO and its former CFO, backdated the grant dates of ACS stock options to coincide with the dates of low closing prices for the company's stock and then filed periodic reports with the SEC that omitted necessary expenses for backdated options.
Additionally, ACS did not have adequate internal controls relating to the granting of stock options and did not maintain accurate books and records concerning its stock option grants.We examine the role of board connections in explaining how the controversial practice of backdating employee stock options spread to a large number of firms across a wide range of industries.The increase in the likelihood that a firm begins to backdate stock options that can be explained by having a board member who is interlocked to a previously identified backdating firm is approximately one-third of the unconditional probability of backdating in our sample.On July 29, 2016 the US District Court for the Southern District of New York dismissed the lawsuit pursued by Matthew Sciabacucchi.The lawsuit contended that some Xerox Corp directors and officers had abrogated their fiduciary duties in connection with the company's .4 billion acquisition of ACS in 2010.
CEO Mark King and CFO Warren Edwards, both implicated in the wrongdoing, resigned immediately.