A piece on FinancialWeek.com looks at an interesting conflict of interest: Companies buying back their own stock while insiders dump their own shares. It looks really bad:

...according to a Financial Week analysis of the 50 largest buybacks, at several of these companies, chief executives sold sizable chunks of stock while the buybacks were ongoing. What's more, the size of those sales exceeded, and in most cases dwarfed, their stock sales in the 12 months before the buybacks were announced.

Because share buybacks prop up the price of a stock, the effect is that these executives may be using shareholders' money to increase the price they can get for their own shares, as they dump them into the buyback. In addition, the analysis found that companies where insiders receive bonuses related to earnings per share targets are more likely to engage in aggressive buybacks. reducing the number of shares increases EPS.

Here's what Warren Buffett once wrote about buybacks:

"Now, repurchases are all the rage, but are all too often made for an unstated and, in our view, ignoble reason, to pump up or support the stock price. The shareholder who chooses to sell today, of course, is benefited by any buyer, whatever his origin or motives. But the continuing shareholder is penalized by repurchases above intrinsic value. Buying dollar bills for $1.10 is not good business for those who stick around."

This all looks very fishy, and could, and probably should, emerge as the next major corporate governance scandal.