Insiders made nearly $50M trading a money-losing company's stock

Isn't this interesting... I have never understood how people can feel like insider trading doesn't hurt anyone but some nameless company. it's called Backdating and sounds like just what it is. The company will give the CEO in question stock option...

Isn't this interesting... I have never understood how people can feel like insider trading doesn't hurt anyone but some nameless company. it's called Backdating and sounds like just what it is. The company will give the CEO in question stock option but instead of giving them what they're worth TODAY they go back to some past date and give them what they were worth THEN. It lets them plup up those exorbant option packages even more. It's even legal... kind of. Well, it's not ILLEGAL...most of the time. Except when you do this: Cyberonics (CYBX) said Monday that its chief executive and chief financial officer had resigned after an internal investigation found that unnamed insiders had incorrectly reported the dates of company stock options for years. Cyberonics general counsel David Wise said in a filing to the Securities and Exchange Commission that the company had under-reported its executive compensation expense by about $10 million and would have to restate its financial statements going back to 1999 See Story Here:http://www.usatoday.com/money/companies/management/2006-11-20-cyberonics-usat_x.htm?csp=N009 Former U.S. congressman Tony Coelho received below-market stock options from Cyberonics (CYBX) in early 1994, three years before he joined the board, at a much deeper discount to the market price than the company's stock-option plan provided for at the time, according to Securities and Exchange Commission filings. See Story Here:http://www.usatoday.com/money/companies/management/2006-11-20-cyber-coelho_x.htm Here is what happened as I see it. The people on the inside get to recieve their stock options at the best price ( a price that isn't available to anyone else) and they manage to squeeze almost $50 million dollars out a company that was losing money (which means the investers - you and me- were losing money- but not them, remember they made $50 million). That's pretty sucky but we're kind of used to hearing about the CEO's making mounds of money while other lose it but the kicker is even though everything point to a big "No, No" the company is saying they did nothin wrong. Um, yeah. No.