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.
Granting stock options to employees is a generally accepted and perfectly legal form of compensating employees. Critics of backdating argue that the practice is difficult to detect and thus encourages boards and executives to use it to synthesize more creative compensation packages.
In our example, backdating the options is the same as giving John Doe a check for $35,000 -- without recording that $35,000 on the within two business days.
Those options give John the right but not the on the date of the grant.
The board formally grants the stock options to John every year at its January board meeting.
No one's pay was "inflated" by backdating, unless you assume that the alternative would have been awarding executives exactly the same number of options at less-advantageous prices.
Which, of course, you shouldn't assume since any sensible employee can see that if his each stock option is worth less, he should get more of them.
The Center for Class Action Fairness would love to object to such a blatantly illegal settlement.
But it can't do so in a vacuum: it can only do so on behalf of a class member who is being ripped off by these attorneys.
The academics concluded that something funny was going on.