Stock backdating illegal
Given that the class attorneys are negotiating money for third parties instead of their own putative clients (for their own benefit, no less), there is also a breach of fiduciary duty that raises questions whether the class attorneys meet the Rule 23(a)(4) standard.
It was a tax advantaged way for companies to pay executives. Shareholders were correctly told the number of options granted and the price of the options.The total compensation to executives granted back-dated options was either unchanged or, perhaps, lower than it would have been, since people tend to irrationally over-value a bird in hand (in the money options) to a dozen in the bush (out of the money options).But it all became worse than a pseudo-scandal, in fact.(The practice seems to have been particularly popular in the tech sector.) In 2007, New York City's municipal employee pension fund sued Apple over the backdated options.A federal judge dismissed the case but class-action lawyers working for the pension fund kept the litigation going.
It's a legal term of art in class action settlements.