In a recent post, we lamented the increasingly hysterical coverage of a supposed “scandal” involving dozens of corporations that might have issued backdated options to their presumably crooked executives. With growing numbers of “suspicious” companies targeted by the media, it seems a bit odd that so few of these companies have been found to have done anything particularly egregious.


Consider an article in the most recent issue of Fortune magazine. The piece at least resists the temptation to level premature accusations at a specific company. But the reporter’s words leave no doubt as to his conviction that there are a whole lot of creeps and criminals out there — somewhere.


Here’s the headline: “Options gone wild! Separating the fragrantly illegal from the merely slimy.”


Then there’s the lede: “Think of the options-backdating brouhaha as corporate America’s steroids scandal: Before the rules changed, the abuses went on for years.”


What abuses? What slime and flagrant crime? Only one specific example is identified, that of a CEO who was, quite properly, fired by his board. The sources quoted in the article, meanwhile, are decidedly more measured. For example, Stanford professor Joe Grundfest, a “leading voice on securities law,” outlines some options-granting scenarios that could theoretically be illegal, while noting that others are, as Fortune paraphrases it, “honest screwups.”


All in all, Grundfest says the issue “is much a more complicated constellation of facts and circumstances than people [like his interviewer?] make it out to be.”


The only other source named is Jordan Eth of Morrison & Foerster, a law firm that is helping companies figure out what has hit them. He tells Fortune, “There is very little law on this. A year ago, this wasn’t a front-burner issue. It wasn’t even a middle-burner issue.”


Those quotes seemed pretty tepid compared to Fortune’s assurances that options backdating can be compared to rampant steroid abuse and drunken, reckless behavior (see “Wild, Girls Gone”). So we called Messrs. Eth and Grundfest to see what they think of these analogies.


They “give rampant hyperbole a bad name,” said Eth, the lawyer.


“I don’t think that the steroid analogy is a good one, at all,” said Grundfest, the professor.


Grundfest explained that while there might be some cases where people have clearly been unethical, there are also plenty of honest people who find themselves accused of possible wrongdoing. “Everybody always thought that what they were doing was just fine — and now people are telling them they might have a problem,” he said.


“Here’s a better analogy. You’re taking over-the-counter cold medicine, and then somebody comes to you and says, you know, if you want to run in a road race that’s a banned substance. And your answer is, ‘No, I didn’t know. And by the way, you knew I was taking this stuff, why didn’t you stop me?’ To say that the whole problem is analogous to steroids is, I think, to miss the fundamental point.”


That being that the bigger this scandal gets, the smaller it seems.

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Felix Gillette writes about the media for The New York Observer.