Reuters reports that roughly 30 companies are known to be under investigation by the Securities and Exchange Commission (SEC) and federal prosecutors for options abuses. Not all the companies are being investigated for spring-loading. No charges have been filed, according to Mercury News, and U.S. attorneys across the country could clear the companies of wrongdoing. It is not clear, however, what course the investigations will follow and Silicon Valley firms, who rely extensively on stock options in their executive compensation plans, are worried.

David Martin, partner at the law firm of Covington & Burling and a former SEC staffer, told Reuters that the SEC “enforcement staff has spoken openly about its concern with a potential illegality in terms of spring-loading.”

In addition to the SEC investigations, companies such as Israel-based M-Systems and McAffe, Inc. have launched their own internal reviews of prior stock option grants. As a result of these internal investigations, M-Systems has announced the delay of the company’s previously announced public offering and McAffe has dismissed the company’s general counsel, Kent Roberts. An internal review revealed that Roberts was involved in an improper stock option grant episode in 2000, according to CNNMoney.com. Further, Mercury News reports that Altera has warned shareholders that millions of dollars may be spent this quarter by the company to deal with federal inquiries.

Spring-loading, unlike backdating, is not retroactive. The purpose, maximizing the profits executives can reap by exercising options at lower grant-date prices and selling them at market price (which is presumably higher, but not always), however, is the same. Spring-loading poses different legal issues than backdating. The most serious of the potential legal issues are charges of insider trading because spring-loaded options are timed to be issued prior to a company announcement that is anticipated to increase the company’s stock price.

“If what you’re attempting to do is obtain gain on information that is not yet public and that information is material to the investing public, then that may rise to the level of what is commonly known as insider trading,” Richard Hans, partner at the law firm of Thacher Proffitt & Wood, told Reuters.

The SEC Rule at the heart of the matter is “Rule 10b-5: Employment of Manipulative and Deceptive Practices.” For rule 10b-5 to be implicated, there must be intentional fraud or deceit by the party charged with the violations. In addition, the Supreme Court in 1975 determined that the Rule specifically requires that the intentional fraudulent act or omission must occur in the context of a purchase or sale of the stock. Nearly two decades later, the Supreme Court also decided that individuals could be liable under Rule 10b-5 if the fraud was connected to the purchase or sale of the stock by the defrauded party even if the fraud itself had nothing to do with the value of the stock.

Recent studies, such as the one conducted by Stanford business professor Alan D. Jagolinzer and currently undergoing peer review, have, according to the Los Angeles Times, uncovered a statistical link between negative corporate news and sales of company stock by company executives. Although Jagolinzer did not find any direct evidence of wrongdoing, he speculates that executives are timing the release of corporate news for times when they are likely to have a positive effect on stock sales, the LA Times reports.

“Frankly, it’s another body blow to options in particular and equity compensation in general,” Ted White, a consultant for the Council of Institutional Investors, told the Mercury News. “You seem to have scandal after scandal from people making enormous amounts of money and finding ways to weasel just that much more. I think people are getting sick of it.”