Setting the date for the issuance of stock options to a date before they were actually issued. This is done to take advantage of a market price, and thus an exercise price, that is lower on the earlier date. The SEC and prosecutors are investigating this practice, as it results in misleading disclosures and inaccurate accounting. It can also turn stock options into deferred compensation that triggers the Section 409A penalties. For the tax consequences of exercising backdated stock options, see a related FAQ.