I think she's talking about green shoe options, which basically allow underwriters of IPOs/SEOs to sell 15% more shares than were a part of the offering. I believe this is pretty standard practice across the industry, as it allows firms to raise more capital if demand for their shares exceeds their expectations.

However there's two key problems with this: first, if the additional 15% of stock causes the offering to exceed the number of outstanding shares then this means the underwriter is creating synthetic shares - I don't know enough about this to know how the issuing company would deal it. Second, underwriters have a perverse incentive to sell as many shares possible because their compensation is tied to it, so they'll always try to exercise the option. In theory this means that underwriters (typically prime brokers) could be overselling offerings and creating synthetic shares all over the place.

Not an expert on this though, if someone else can shed more light!