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The tech industry's stock option backdating scandal appears to be gathering steam.

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Rather, he's accused of backdating stock options to lure an unnamed employee to take a "high-level sales position." An FBI affidavit says Reyes told Jensen to backdate an offer letter by more than two months to benefit from a more favorable share price in late 2001.

Reyes' attorney has defended his client as wrongly accused, saying "financial gain is always the motive in securities fraud cases, and here there was none. The stock options are awarded just before news, usually positive, is announced.

Q: Under what circumstances is backdating legal or illegal? If a company's executives are up-front about it with shareholders and the government, everything's probably fine. Attorney's office in New York have been conducting parallel investigations. Paul Caron, a visiting professor at the University of San Diego School of Law and author of the Tax Prof blog, outlined two possible tax law violations in an e-mail to CNET Typically the contact comes in the form of a grand jury subpoena.

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