Depending on how you look at it, you may view the frenzy over stock option backdating as a reprehensible practice on the part of unethical executives to pad their wallets – in some cases, to the tune of millions of dollars. Or, you may see it as a major distraction for current executives who should be minding the store rather than doling out dollars to accountants and auditors for actions their predecessors may have taken years ago.

WIRELESS AT RISK Either way, or maybe somewhere in between, there's no denying that stock option backdating is hitting the high-tech industry hard. Companies – specifically in the wireless space – are particularly susceptible because they depend on stock options to lure employees when dealing with high capital expenditure and development costs. Backdating, picking a time when the stock was trading at a lower point and presenting it as the date on which it was granted, is kind of like picking the winner of a race after it has been run.

In some cases, it appears company records were doctored, particularly aggravating to shareholders who had no idea the backdating was occurring. In the end, "shareholders feel they are the ones left footing the bill," says Albert Lin, analyst with American Technology Research.

Glass, Lewis & Co., a San Francisco investment advisory firm, issued a report in late October showing that at least 152 companies have announced internal reviews, Securities & Exchange Commission (SEC) inquiries or Justice Department subpoenas related to their historical stock-option grants.

Some of the companies on the list, with varying degrees of backdating or which are investigating whether there was any backdating, are: American Tower, Boston Communications Group Inc. (bcgi), Broadcom, Crown Castle International, Glenayre Technologies, Juniper Networks, Openwave Systems, Research In Motion (RIM) and VeriSign.

The scandal has resulted in the recognition of at least $5.2 billion in additional pre-tax compensation expenses, a figure that Glass, Lewis senior research analyst Todd Fernandez says will get much higher before all is said and done. The collective decline in market capitalization of the companies that made backdating revelations amounted to $5.1 billion.

The ramifications for companies that discover backdating aren't entirely clear, as companies are still internally reviewing their practices and government officials are continuing their investigations. At least 44 executives and directors at 24 companies have resigned or been fired, according to the Glass, Lewis report.

WORST CASE In the extreme example of Comverse Technology, former CEO and founder Jacob "Kobi" Alexander has been on the lam in India, while the company's former CFO, David Kreinberg, reached a settlement that involves the payment of nearly $2.4 million and cooperation in the SEC's investigation. William Sorin, the company's former general counsel, will be sentenced in February for his part in the scandal.

For some other companies, the long-term impact may be minimal. Mark DeRussy, an analyst at Raymond James who follows public tower companies, doesn't expect backdating to have an impact on American Tower's future cash flows, and he notes that the current management wasn't around during the years when backdating was popular.

At the very least, companies are restating financials and likely need to take 1-time writedowns, but the taxes associated with the statements are what could really sting some of them, according to Fernandez.

SPREADING THE WORD Did backdating spread through word of mouth? A study by watchdog group The Corporate Library found that of the companies under investigation as of the end of September, 51 of them had directors sitting on other companies implicated in the scandal. The most important relationships involved several directors who served on boards prior to 2002, when most backdating activity occurred, the group says.

Indeed, Lin notes that former Brocade CEO Greg Reyes, who was charged with securities fraud related to backdating, happened to be on the board of VeriSign and was head of its compensation committee. Juniper CEO Scott Kriens and VeriSign CEO Stratton Sclavos are identified by The Corporate Library as key figures, noting that between them, they sit on four other implicated boards. The study's authors also found a "wealth of intertwined relationships" involving the Silicon Valley law firm of Wilson Sonsini Goodrich & Rosati.

For Comverse, which garnered headlines for its former CEO and founder's infamous behavior, the worst may be over. Its stock price plummeted when problems at the company, which has tried to distance itself from the former executives, first surfaced. "Of any company, it looks like they are finally coming out of it," Lin says.

As for the others, they're likely to keep their accountants and auditors busy for the foreseeable future.