By Richard Koman for SiliconValleyWatcher.com

On July 20, the full force of the law came down on former executives of Brocade Communications, when the SEC, the US Attorney's Office and the FBI filed charges against Gregory Reeves, the company's former CEO, and Stephanie Jensen, former VP of HR, for crimes related to the backdating of stock options.

U.S. Attorney Kevin V. Ryan stated, ``The criminal charges filed today allege that this backdating scheme contributed to the restatements of hundreds of millions of dollars of Brocade's financial results. The criminal complaint alleges that these defendants altered and backdated Board of Director meeting minutes and employment offer letters in a scheme to defraud in connection with the pricing and granting of stock options." (Mercury News, 7/20)

Today, the SEC announced that it is investigating Santa Monica-based Activision, a game maker, over its accounting practices, presumably looking at failure to account for backdated options.

And Friday the IRS said it would be looking closely at executive compensation for problems with options.

And run of the mill employees who received options may also be facing criminal liability, Eumi Choi, second in command at the US Attorney's Office for Northern California Today, told the Mercury News in an interview.

On Sunday, the Chronicle looked looked at what fueled the backdating craze of the 90s.

"The recruiting pressure was so intense," said Ron Bottano, senior partner in the executive compensation practice at recruitment firm Korn/Ferry. "Companies were viewing (options) as currency. (Job seekers) focused on the number of options, 'Can I get more options at one location than another?' "

...

"Because of the very rapid growth (in granting of stock options), the infrastructure for administering and dealing with it didn't grow as quickly," said Corey Rosen, executive director of the National Center for Employee Ownership. "To put it simply, you had a lot of amateurs. Professional advisers were giving advice that may not have been very good and stock plan administrators made mistakes."

Bottano said the software commonly used in the 1990s to administer options grants made it easy to change records, facilitating backdating. "You could make an edit, the program didn't ask for any verification," he said. "It was more a tool than an auditing mechanism. The systems weren't very advanced because options weren't."