Short the CEO - Buy the Stock? | 1

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Short the CEO - Buy the Stock?

Options backdating has sparked investigations at more than 120 companies and cost a few CEOs their jobs. But sometimes uncertainty creates a buying opportunity.
By Katie Benner, Fortune reporter

Brocade Communications Systems (BRCD)

2006 price change: 85.7%

Executive casualty: Ex-CEO Gregory Reyes was indicted on securities-fraud charges in August and pleaded not guilty.

Investment Outlook: Risky. The storage networking firm has cleaned up its financials, but it's struggling to maintain its slowly eroding market share, and the stock is pricey. Plus, clouds of uncertainty still hover as investors wait to see how its acquisition of McData shakes out.

Price change data for all stocks from 12/30/05 through 11/2/06. Source: Baseline

More sneaky options schemes

Amidst backdating options scandals, American Tower uses another legal tactic for hiding executive compensation - backdoor options filtered through a subsidiary, Fortune's Bethany McLean reports. (more)

A primer for firms hit by stock options scandal

How companies handle the investigation into backdating can have a big impact on their business - and investors. (more)

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