The fallout from the options backdating scandal continues and the dogs are barking.

The number of public companies under investigation by the Securities and Exchange Commission or federal prosecutors has grown to more than 30, according to a report.

And in Australia, the corporate regulator is investigating an options scam where hedging schemes and financial instruments are being used by executives to sell or hedge their options during the vesting period without telling shareholders. In other words, they are turning performance pay into guaranteed pay, something which destroys the whole purpose of having options in the first place.

Options scams are dangerous because they can set off shock waves of accounting errors, regulatory and tax problems, and financial costs.

The difference between Australia and the USA is that the backdating scams in the US can breach state and federal laws. In Australia, strictly speaking, the hedging instruments don't seem to be illegal but in Australia, as in the US, it makes a mockery of claims that executives' interests are aligned with those of shareholders. And in both countries, executives are getting a cosy deal that's denied to the rest of the population: shares at the price they want to pay, with no downside risk.

Backdating is not the same, but it's certainly in the same vein as "springloading" where a grant date and exercise price are set shortly before the release of positive news. And yes, it smells like something that could turn into insider trading.

For an interesting analysis of the research that uncovered this scandal, check this report in the Sunday Times.

University of Iowa associate professor of finance Erik Lie was looking at whether share-option grants prompted executives to take on more risk to boost their businesses. What he found instead was that in a large number of cases they were getting rid of risk. Well, at least when it came to their own options.