Carson Accused Of Backing Illegally Backdated Stock Options
Ben Carson is accused of participating in a scheme where 1.01 million shares if illegally backdated stock options were issued.
The allegations stem from two shareholder derivative complaints and their consolidated settlement: documents obtained by Gawker that list Carson as a co-defendant alongside most of Costco’s board and several of its C-level executives.
The suits accused Costco’s board, and in particular members like Ben Carson who served on its “compensation committee,” with essentially cherry-picking the issue dates for Costco’s incentive and nonqualified stock options. By changing the option grant date to a previous day on which the company’s stock price was exceptionally low, the board guaranteed that these stock options would have a greater profit margin once Costco’s executives chose to exercise them (i.e. sell shares). These cheap stocks—real bargains in direct violation of the company’s own policies—were then passed on to Costco’s senior management and, in some cases, bestowed upon the discount retailer’s rank-and-file employees. It was like an elite Costco, inside the Costco.
All told, the beneficiaries of this scheme allegedly wrested over $173 million away from the company in pumped-up stock sales and unrecorded compensation during the 10-year-period covered by the two civil suits.