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Monday, July 4, 2011

Option Backdating, 409A, SOX and . . . "Suits"

Someone has to endeavor to identify 409A, SOX and backdating references in television series, right? Well, I'm watching the pilot to the new show "Suits" and I come across the following pricelessness:

Gabriel Macht's Harvey Specter: I'm going to show you what a Harvard attorney can do. Pick a topic.

Patrick J. Adams's Mike Ross: Stock-option backdating.

Harvey: Although backdating options is legal, violations arise related to disclosures under I.R.C. Section 409A.

Mike: You forgot about Sarbanes-Oxley.

Harvey: The statute of limitations renders Sarbanes-Oxley moot post-2007.

Mike: Well, not if you can find actions to cover up the violations established in the Sixth Circuit May 2008.

Harvey: That's impressive, but you're sitting at a computer.

Mike: Playing hearts. Sorry, if you want to beat me, you're going to have to do it at something else.

Harvey: How can you know all that?

Mike: I told you - I like to read and once I read something I understand it, and once I understand it I never forget it.

Harvey: OK, look, this is all pretty fascinating stuff, but I'm afraid I gotta get back to work.

So what if we confuse 409A with SEC rules? So what if we throw in a nearly incomprehensible SOX reference? So what if, notwithstanding references to Skadden and the like, the show itself has very little to do with law firms? The fact is that we've now got a television show that in one scene mentions stock options, backdating, 409A and SOX - while at the same time maybe indeed even accurately reflecting just "what a Harvard attorney can do." Fun.

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