As Long as We Have This, There is No Hope of Sustained Economic Growth

One of the questions crying loudest from the developing scandal of backdating stock options is, Why now? As new companies announce daily that they're investigating their stock option practices or that they've received inquiries from the SEC or federal prosecutors - United Health Group, Caremark Rx, (Research) and Juniper Networks (Research) are among those that have acknowledged ongoing probes - you have to wonder what sparked the mess. After all, we're talking about pre-2002 behavior, mostly from the '90s.

The problem, in brief, is that executives at some companies were backdating their stock options to dates when the stock was at its low for the year or the quarter, tilting the odds of profiting on those options heavily in their favor. Backdating isn't necessarily illegal, but following the complicated rules would largely eliminate the advantages of doing it.

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