On July 19th, the Eighth Circuit affirmed the entry of judgment as a matter of law in favor of defendant accused of participating in the grant of backdated stock options. The Court found that the SEC failed to prove the required elements of scienter and negligence on its claims that the defendant, an outside director, had participated in the improper grant of "in-the-money" stock options. There was no evidence that the defendant knew that the alleged omissions or misrepresentations concerning the option grant date could mislead buyers or sellers and there was insufficient evidence that the alleged misrepresentation or omission was so obvious that defendant must have been aware of it. SEC v. Shanahan.