If you look at all the press releases from various companies on the options backdating issue and start to detect patterns, you cannot but help think they are written all by the same legal firm - they have the same boiler plate stuff, bunch of nonsense, a few technical terms and a few buzzwords. So we are attempting to clear up the mess with plain-speak.

1. What they say - " The SEC has issued an informal inquiry against our options backdating practices".

What they mean - " Damm! the SEC is a pretty rough bunch. Their informal inquiry looks more like a indicitment. We are not exactly sure what all we did wrong and not sure of what all we have to do to correct it. In any event, if we say its informal then the stockholders will think its nothing big."

2. What they say - " We intend to fully cooperate with the SEC" What they mean - "What choice do we have? Its not as if we have a whole bunch of options. Its like your ex-wife asking you to talk to her through the divorce settlement. If we dont cooperate we will all go to jail. We have to cooperate else we'll look guilty. If we do cooperate we will only end up paying a bunch of lawyers fines and settlement fees."

3. What they say - "There were material weaknesses in our internal controls" What they mean - " No one was minding the shop really. We were all busy getting drunk on "eyeballs", "business development deals" and "barney relationships". The accountants and lawyers were there too. They actually helped us through this. When someone from the audit team asked, we would either transfer them or ask them to leave. Now we have a mess. This SOX thing has also put some pressure on us. If we admit we had internal controls problems but now we passed our SOX audit, then we will absolve ourselves of all blame."

4. What they say - "Senior executives in the company who have been associated with this have resigned" What they mean - " Its not us its them. We are the nice guys. If there was anything going on it was under their watch. Sue them and leave us alone"

5. What they say - "Our board and audit teams have already started an internal investigation of our options backdating and will report their results soon" What they mean - " Our board got really scared they might get implicated in this. Finally after all these years they actually have to do some work to earn their pay instead of coming to our meetings, eating donuts, asking for gourmet coffee and paying golf with the CEO. So they came together, asked us to spend a bunch of money so they could CTA (Cover their AS*)

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