Politics aside, few would argue that GOP presidential hopeful Ben Carson—a retired pediatric neurosurgeon—isn’t a bright guy. So what does it mean that, while serving on Costco’s board from 2002 to 2005, Ben Carson was accused of granting over 1.01 million shares worth of illegally backdated stock options?

The allegations stem from two shareholder derivative complaints and their consolidated settlement: documents obtained by Gawker that list Carson as a co-defendant alongside most of Costco’s board and several of its C-level executives.

The suits accused Costco’s board, and in particular members like Ben Carson who served on its “compensation committee,” with essentially cherry-picking the issue dates for Costco’s incentive and nonqualified stock options. By changing the option grant date to a previous day on which the company’s stock price was exceptionally low, the board guaranteed that these stock options would have a greater profit margin once Costco’s executives chose to exercise them (i.e. sell shares). These cheap stocks—real bargains in direct violation of the company’s own policies—were then passed on to Costco’s senior management and, in some cases, bestowed upon the discount retailer’s rank-and-file employees. It was like an elite Costco, inside the Costco.

All told, the beneficiaries of this scheme allegedly wrested over $173 million away from the company in pumped-up stock sales and unrecorded compensation during the 10-year-period covered by the two civil suits. And, incidentally: The U.S. Attorney’s Office for the Western District of Washington state came to similar conclusions after conducting a two-year investigation into Costco’s executive compensation practices. The U.S. Attorney’s Office investigation was looking at backdating from 1996-2003. But this shareholders’ derivative suit covered a slightly wider range, 1995-2005, for the backdating fraud itself, and covered up to the date of the filing, 2009-ish, for all those “by-product” charges, like the inaccurate SEC filings. The U.S. Attorney’s Office and their multiagency task force, however, ultimately declined to pursue criminal charges after considering “multiple actions taken by Costco executives, including the fact that Costco self-reported the backdating to the SEC [in 2006].”

The complaints were filed in September 2008 and June 2009 respectively, by Pirelli Armstrong Tire Corporation Retiree Medical Benefits Trust, a Tennessee-based employees beneficiary association, and by Daniel Buckfire, a random guy from Michigan with, you know, Costco stock. Their stats-heavy, 141-page consolidated complaint (which you can read in full here) was settled in plaintiffs’ favor in June 2011, forcing Costco to overhaul its corporate governance. The settlement mandated, for example, in-person votes on key decisions over the less reliable “unanimous written consent” procedures that the company had previously used. It also required Costco and its executives to pay $4.85 million to the plaintiffs in legal fees and expenses.

You can be forgiven for not remembering this, but stock options backdating was something of an epidemic in the mid-00s, during the go-go “Let’s see if we can wreck the whole economy!” exuberance that preceded the financial crisis. Household names like Cablevision, Apple, and Home Depot; lesser known firms, like Sunrise Telecom and Vitesse Semiconductor; video game giants like Activision and Electronic Arts; Pixar(!); and, perhaps most distressingly, The Cheesecake Factory—all these firms and more found themselves under SEC scrutiny, alongside Costco, for the clear statistical evidence of stock options backdating.

In the Costco case, the lawyers for Pirelli’s retiree benefits trust (and Daniel) used no less than six court-accepted methodologies, including binomial distribution probability analysis and a statistical ranking system similar to the one used by the Wall Street Journal in their 2006 investigations into options backdating. Plaintiffs’ counsel found that the likelihood of Costco’s board landing on these options grant dates by chance was over 1 in 1 million—which is to say, less likely than your getting struck by lightning or being killed in an extinction-level asteroid impact in your lifetime, but more likely than your winning a multi-state Powerball.

For right now, though, it will be sufficient just to look at some of the fortuitous option dates chanced upon while Ben Carson was on Costco’s board of directors:

They just look lucky, don’t they? Serendipitously low.

Carson himself allegedly personally benefited from the falsified options. According to the complaint, the concealment of the backdating scheme led to the misrepresentation of Costco’s actual net income, its shareholders’ equity, and the full tax obligations involved—and all this had the ancillary benefit of artificially inflating Costco’s stock price. In April 2006, Carson sold roughly 12,000 shares of the company at this elevated price, netting $655,460 in what was alleged in the operative complaint to be, effectively, insider trading (just one of the many charges leveled against him by the plaintiffs).

Yet, it’s also true that this was penny ante stuff compared to the illicit gains made by some of Costco’s other senior executives, according to the complaint. The company’s cofounder and CEO, James D. Sinegal, to cite one example, received backdated shares in the hundreds of thousands, unlike Carson, and sold 2.38 million inflated shares during the life of the backdating scheme, for a cumulative payout of $94.6 million. (Among the considerations that lead the U.S. Attorney’s Office to decline prosecution was that Sinegal and Costco’s CFO, Richard Galanti, generously slapped themselves on the wrist, forgoing some fresh stock options and about $1.2 million in bonuses between them. These masochists had clearly suffered enough.)

According to the complaint, the fact that Carson only profited in the meager six figures from the backdating changes nothing about his lead role in supervising and signing off on the fraudulent compensation program, for years.

As one of four members of Costco’s compensation committee, as well as through his work done on behalf of its audit committee, and his general directorial duties, Ben Carson’s signature is all over years’ worth of documents authorizing the questionably dated stock options; written communications with Costco’s external auditors; and official reports misrepresenting those stock options, along with the rest of Costco’s financials, to both shareholders and the SEC.

“Options backdating, you know, it seems ‘juicier’ the more there’s self interest involved, and a conflict of interest, and that sort of thing, profit for individual directors,” says Anita K. Krug, an associate professor at the University of Washington School of Law. “But even if that’s not there, not adequately dealing with the ‘being informed’ part of furthering the duty to be non-negligent—even if liability often doesn’t attach under state corporate law—it can still be problematic.”

Krug, a Harvard law graduate who has spoken internationally on corporate governance and securities law, feels it’s “never a good idea” to discount the potential damage done by breaches of this kind of fiduciary duty, known as duty of care, over the more legally actionable duty of loyalty breaches, which cover conflicts of interest.

As a director, Krug says, “Your obligation is to not be negligent, but under most states’ corporate law, you will not be held liable unless you acted grossly negligently—so super negligently.”

“That’s a really low standard—and most directors, even [those] that are negligent, pass it.”

Carson received a nominal $45,500 annually for his mental and physical exertions as one of Costco’s board members, according to financial disclosures recently filed with the FEC, in addition to another $50,000-$100,000 in annual dividends as a shareholder. It was a real job, in other words, with real pay and real obligations. You don’t have to be a brain surgeon to figure out that Ben Carson bears some culpability here, in one of the few large managerial roles he has held that’s even remotely comparable to holding national office.

“Signing-off, in the board context, is something more than simply saying, ‘Oh, it’s a document. Sure. I’m sure our counsel prepared it well. Let’s sign off on it,’” Krug says. “It means actually reading the thing.”

“Typically—and I don’t know what Carson was given, in terms of information—but typically directors are given a lot of information before a board meeting,” she says.

“I mean, each board typically has a counsel devoted toward advising the board on legal issues. The counsel certainly doesn’t want to be charged with any sort of malpractice later on. Maybe it’s not the counsel that’s responsible for providing the information, but whomever is wants to make sure the board has sufficient information to make all appropriate decisions in a well-informed manner.”

Presidents of the United States, you may recall, are similarly required to manage complex bureaucratic institutions, and to sign off on written materials that they are expected to have read, comprehended, and actually endorsed.

An accounting of the documents that Carson either had a hand in preparing or ostensibly ratified with his signature ought to provide some perspective on the severity of his involvement.

According to the complaint, for seven years beginning in December of 2002, Ben Carson annually signed off on materially false proxy statements (Form DEF 14A “definitive proxy statements,” if you’re nasty), that were filed to the SEC and then subsequently used by Costco’s shareholders to make crucial, “informed” votes about the company’s business at their annual meetings. Beginning in October of 2002, Carson’s position on the compensation committee meant that he was “delegated ultimate responsibility for administration of the Company’s 1993 Stock Option Plan and 2002 Stock Option Plan” according to the consolidated complaint, attending no less than four meetings from 2002-2004 “during which he engaged in backdating options.” For the duration of Carson’s appointment on the compensation committee, he also prepared and signed off on committee reports submitted with the annual proxy statements.

Carson also communicated and sometimes worked with Costco’s external auditors on behalf of the board’s audit committee, withholding key information about the stock options fraud with these auditors over the course of six meetings of the Audit Committee in fiscal year 2002, seven meetings in 2003, nine meetings in between 2004 and 2005, and seven meetings in 2006, and possibly more, according to the complaint.

And, finally, the complaint states that from 1999 until 2008, Carson joined the rest of the board in signing off on falsified Form 10-K reports to the SEC.

Based on this voluminous paper trail, the complaint accuses Carson of a litany of wrongdoing, beyond insider trading, that included unjust enrichment, corporate waste, constructive fraud, gross mismanagement, violations of the Exchange Act, breach of his fiduciary duty, and others.

Given how quickly the Costco case shifted into mediation and settlement mode, it is still an open question whether Ben Carson was merely signing off on anything and everything like an irresponsible idiot, if he was somehow tricked, or if he was knowingly engaged in the fraud—or for that matter which of these versions of Ben Carson voters will find more presidential.

We’ve reached out to the Carson campaign, via the media contact form on the Carson 2016 website, and to Dr. Carson directly via an available email address. They have yet to respond, but we will update this post if they do.

Ben Carson stepped down from Costco’s board of directors this past May to focus on his presidential campaign.

Image by Jim Cooke, photos via AP

Contact the author at matthew.phelan@gawker.com.