[greedo]

So your friend had a large taxable event occur, ignored any advice that such tax event would persist over the tax year, and failed to act at any time to address his tax shortfall. Sounds like he had a shit tax/financial advisor. And to consume all of his net worth etc, the number of options that vested must have been quite large.

Not going to be sympathetic to someone YOLO'ing their compensation/taxes.

[WalterBright]

He didn't know about that tax rule, which was enacted that year. A lot of people were shattered by it.

[greedo]

I think he must have relayed the tale to you incorrectly. Stock options aren't taxed until you exercise them. Been this way since 1969.

Restricted stock is taxed at vesting, unless you choose to be taxed when they're granted to you. Ditto since 1969.

RSUs are taxed at vesting/settlement as ordinary income. This was pretty much the case since 1969 as well, but fully confirmed in 2009.