By backdating

Local institutions, in particular, display negative trading imbalances earlier in event-time and earn consistently higher trading profits than non-local institutions.Although we find some evidence of over-reaction following the arrival of information about the backdating scandal, these patterns are short-lived and exclusively due to the activity of non-local institutions.Although in exceptional cases – where third party rights are not affected – the courts might be persuaded to treat the stated date as being the effective date, a situation we return to below. There are rare occasions when it may be permissible or even justified to do so.

Unlike their inability to anticipate other corporate events, institutional investors as a group display negative abnormal trading imbalances (i.e., buy minus sell volumes) in anticipation of firm-specific backdating exposures.

However, such doctrines are normally limited to situations where one party backdates the contract without the knowledge or consent of the other.

Where both parties consent to the backdating of the document, normally the courts in common law countries will simply disregard the backdating of the document, and treat the rights as accruing from the date when the document was actually executed.

In such cases it would be perfectly proper for the parties to re-execute an identical document to replace the missing one.

Slightly more tenuously, where the parties reached a binding agreement on a certain date, but only reduced it to writing on a later date, they might be justified in putting the date of agreement rather than the date of execution if the terms were in fact identical (a more likely scenario given the length and detail of many modern written contracts would be where the terms of contracts are agreed by e-mail on a certain date, but the parties were only available to sign the actual physical documents upon a later date).


  1. If you are thinking of rekindling your relationship with an old flame, you came to the wrong place. What “backdating” is about is signing an agreement today with.

  2. This paper examines the role of institutional trading during the option backdating scandal of 2006–2007. Unlike their inability to anticipate other corporate events.

  3. May 15, 2011 A BBC report on the Dominique Strauss-Kahn story today states Mr Strauss-Kahn's apparent decision to fight the case echoes an earlier episode where he.

  4. Mar 05, 2009 Lawyers who were trained in commonwealth jurisdictions may have an ingrained concept that backdating a document is generally improper, if not illegal.

  5. The lead investigator, who was later fired for backdating a search warrant in a different murder case, also took the stand for the defense. —

  6. Using the executive stock option ESO backdating scandal as a backdrop, this paper examines whether compensation committees can effectively set executive.

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