Last week was a big week in the US for options backdating scandals.

Former executives of Brocade, former president and CEO Gregory Reyes and former vice president of human resources Stephanie Jensen, were hit with a 12-count indictment for scheming to backdate stock option grants to give employees favorably priced options without recording necessary compensation expenses. That's on top of the securities fraud charges levelled against them in July. In addition, to that executives at Converse have been charged and semi-conductor licensing company Rambus is in trouble too.

For the best summary of last week's events, check this EE Times report.

This coincides with this report from Bloomberg of Brocade being forced into strengthening its corporate governance and agreeing to help pay $525,000 in legal fees to settle shareholder lawsuits over stock-option backdating.

The war on options scams is heating up in Australia too.

Industry superannuation funds in Australia have launched a campaign targeting companies using hedging schemes that allow executives to hedge or sell their options. They want the law changed to tighten up the controls and force companies to come clean.

On one hand, what executives do with vested options is their own private business. But the nagging question is whether their position puts them in a position of having inside knowledge.

Unlike the options backdating in the US, the hedging of options is not illegal but it does mislead shareholders.

Think about it: incentive pay is turned into guaranteed pay and executives, unlike the rest of the population, are profiting from shares at the price they want to pay, with no downside risk. And investors are being kept in the dark.

The Australian Council of Super Investors is leading the charge and has put out a paper, Disclosure implications for executive hedging of long-term incentives.

You can read my report on it here.