Role of the Expert Witness in Stock Option ControversiesBy HG.org
Stock option controversies often arise through the devaluation or tampering of the stock options given to the employees as a way to increase income over time as the company grows. However, it often takes an expert witness to explain these matters and demonstrate the problems that exist and that decrease the value so that stock options are nearly worthless.
What are Stock Options?When an employer has stock in a company but little other funding, he or she may provide stock options rather than bonuses or an increase in salary. These funds are not usually available immediately, but the long-term plan is that the company will increase in value which will drive up the stock prices and ensure that the employees have additional income through the stock. Others may use the little power the stock gives as partial ownership in the business to influence the decisions of how the entity will run in the future. Scams and scheme to devaluate the stock harm workers significantly when stock options are useless.
The Expert Witness in Stock Option ProblemsWhen there is a devaluation of the stock provided to the worker, he or she may need to initiate a lawsuit against the culprit. The professional hired for these matters has a difficult task of explaining how the devalued stock harms the employee and why the litigation is necessary for the much-needed compensation. Additional complications arise when the stock requires discussion as well as the specifics of how the defendant devalued the company stock through certain scams or schemes. These tactics are often illegal or immoral. The perpetrator may also harm the company in the process.
Scams to DevaluateWhen an expert witness becomes part of a complex case, he or she may need to discuss and explain the problems that the plaintiff faces because of the actions of the defendant. In these situations, he or she will need to provide examples and demonstrate certain issues that exist with stock options that employees take rather than bonuses or raises in pay. Devalued stock that does not provide a means of income to the worker is often useless and gives no benefits at any point. The scams affect all employees with these same stocks, but the scheme used could still benefit management or the owner of the company.
Manipulating financial information, undermining the valuation of a company or spreading rumors that could harm the stock are all possible scams a third party or someone connected to management may initiate. Sometimes, the company will engage in these practices and then owe damages to employees based on the pain and suffering caused, the loss of additional income and the value of the stock before the devaluation. The expert is often given the tasks of calculating the damages and the actual and real value of the stock before the scams became effective.
Discussion from the Expert WitnessWhile many expert witnesses must test certain issues or processes with the materials of a case, stock options scams and schemes
may have little to actually test. However, the professional may need to research and discover specific issues that may exist. Then, he or she will need to initiate a discussion of the concern with the courtroom. Depending on how the defendant devalued the stock, this may lead the expert to confront certain other matters. However, his or her primary goal is to inform the courtroom of what happened and how it affected the plaintiff.
Some claims with stock option controversies and scams lead to billions in damages to hundreds or thousands of affected employees. The severity of the actions committed by the company or an outside party and the devastating effect on the workers within the company are topics the expert will need to discuss with the judge or jury. Any confusing elements require explanation, and the professional may also need to unravel the complex workings of stock and how these concepts and certificates provide the individual with money.
Testimony for Stock Option ProblemsWhether the case involves manipulation of data, rumors that devalue the company or special methods the defendant utilized to harm the employees, the professional will need to present clear and concise testimony about the stock options problems that caused the damage. Compensation owed to the workers may require significant money from the company to repay the employees. The judge may even determine that punitive damages are necessary based on the actions of the defending party in the claim.
While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.