Corporate governance watchdogs, the Corporate Library and institutional investment adviser Glass, Lewis & Co have revealed the warning signs for companies engaging in options backdating practices.

The red flags include missing Form 4 filings, options repeatedly granted when the share price is at quarterly lows and at irregular times and excessive stock option grants. Also, keep an eye on companies that have executives or board members who had previously served at companies that had come under investigation.

Also worth checking out is the Glass Lewis Proxy Talk proceedings looking at liability issues surrounding backdating and what investors can do about it.