Originally Posted by
Excargodog
Honest question. Why is it fraud? I mean, per their corporation incorporation documents they are allowed to (but not required to) sell up to a certain number of shares of stock to raise capital for the business. What law or reason prevents them from buying those shares back - especially if they are relatively cheap and the company has the ability to buy them back?
I mean as an employee, yeah, I’d rather they just raised wages with the extra cash, but what makes it fraud?
It was considered fraud by executives, due to manipulation of prices in advance of exercising options at a lower price. Excess capital should be distributed to shareholders via the dividend.