Most investors are aware of the options backdating scandal that has hit the market recently, but many questions still remain: How widespread is this problem? And, are there other ways in which executives can take advantage of options to profit off of shareholders? Unfortunately, there are several studies that have concluded that option grants have uncanny timing in the the majority of public companies. In fact, it was studies like this that eventually brought the current instances of backdating fraud to the SEC's attention - in particular UI Professor Erik Lie's paper, which suggested that many option grants were given at such unpredictably opportune times that it must be been set after the fact. Obviously, this turned out to be true as the SEC continues to investigate several companies. Meanwhile, many other companies continue to practice other shady techniques to provide executives with even more money.

While backdating is currently in the spotlight, there are many other similar techniques that executives can use to profit from shareholders. One such technique is known as "bullet-dodging". This is a technique whereby option grants are awarded shortly after a negative press release, so that they are issued at the lowest possible prices. The opposite of this is "spring-loading", where executives will delay positive press releases until after option grants take place. Both of these techniques involve profiting off of non-public information; however, their usage remains widespread due to a lack of legal definitions. The SEC has yet to pursue any of these cases, and as a result there are few court cases to create more refined legal definitions. Until this happens, the practices will likely to continue and investors will have to simply be watchful. Currently, the SEC does require companies to report option grants within two days of their issuance, so it does make it possible for investors to track. Portals like ExecutiveDisclosure.com can help investors find such dates in order to somewhat predict good or bad news releases.