A new study suggests the options backdating scandal that took place in the mid-2000s was just the tip of the iceberg.

Research conducted at the University of Houston's C.T.BauerCollege of Business used statistical analysis to investigate patterns of stock option granting at 4,000 public companies. The goal of the effort was to identify grants that were given when a firm's stock was at or near a low price point.

The results highlight 141 firms that gave senior executives stock grants at extraordinarily favorable prices. The researchers argue that giving grants on such favorable days demonstrates a high likelihood of options backdating. The Houston study is particularly enlightening in that 92 of the firms were never formally investigated when the options backdating scandal was discovered. (Wall Street continues to attract fresh hordes of ghoulish people committing the same old crimes. Read about them in Tales From Wall Street's Crypt.)

Backdating Review
Options backdating, as you may recall, involves changing the date on which a firm claims to have issued a stock option grant. Granting options at a lower rate than the current trading price guarantees instant profits to executives.

Options backdating was not illegal at the time the options in question were granted as long as proper reporting procedures were followed. That noted, the Wall Street Journal cited Omnicom Group, Dress Barn, and United Rentals as firms identified in the study that likely participated in the practice. Some of these firms weren't even coy about their efforts, brazenly granting options at the lowest trading point in near memory. (Learn more in The Dangers Of Backdating.)

SEC Backlog
The University reports that "Accountancy & Taxation Associate Professor Scott Whisenant and Visiting Scholar Rick Edelson, authors of the study, reported their findings to the Securities and Exchange Commission several months ago, providing a preliminary list of suspected companies." Should the Securities and Exchange Commission (SEC) take a break from investigating the plethora of other scandals Wall Street has cooked up to delve back into this one, the CEOs of these firms are likely to find themselves the subject of some uncomfortable attention. (Learn how to spot a company's fiscal discrepancies, read Playing The Sleuth In A Scandal Stock.)

The implications of the study are particularly interesting in that it covered only 4,000 firms. Researchers have suggested that expanding the universe to include a larger number of companies would likely double or triple the number of firms likely to have participated in options backdating.

Statute of limitation issues may enable regulators and scofflaws alike to brush this one under rug, but shareholders would do well to pay attention. With corporate profits in the red at more than a few firms and stock prices sitting somewhere near the basement, rich compensation to CEOs who run money-losing businesses is certainly cause for concern, especially when the money they are taking home has come out of your pocket. (For further reading, check out The Biggest Stock Scams Of All Time.)

For a closer look at the methodology behind the study, you can view the researchers' process and statistical results here.