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Is Spring-loading Wrong? Testimony on Capitol Hill today did nothing to resolve the ongoing debate over whether spring-loading of stock options is illegal or unethical.

Helen Shaw, CFO.com | US
September 6, 2006

Of Course it's Wrong!

Anytime a corporation makes a decision to benefit itself or its employees at the expense of others, and the decision is based on non-public material information, it is wrong.

It is simply a variation of insider trading. The company knows something that it believes will drive the stock price (up or down), and acts to profit from that "inside" information.

A fact that get too easily forgotten these days, the company has a fiduciary responsibility to always consider its shareholders first, and an ethical responsibility of honesty to the public.

Spring loading violates both of these public trusts.

Posted by Mark Trinske | Sep 7, 2006 9:56 AM ET