The conventional thinking on stock options backdating cases [1] was that prosecutors would have the best shot at companies that continued their shenanigans after Sarbanes-Oxley became law. Recall that Sarbox requires that executive (not rank and file) option grants must be reported within two business days of the grant date. But the Brocade decision really may change that. The prosecution won without airtight evidence, and Business Week Online says that the case "sets a low bar for prosecutors to clear, should they decide to bring more cases."  Needless to say, fear is mounting in Silicon Valley [2] and elsewhere. It's way beyond a civil issue now. CEO Greg Reyes faces up to 20 years in prison. It is critical that you leave no room for doubt [3] with your grants. You need to do more than go by the book. Even appearances can be damning as Reyes supporters would say.

For more:
- here's the article [4]