Remember how the timing of options grants to maximize their value was the big scandal last year. The government got on the case when the Wall Street Journal reported that there was virtually no chance that random timing of options grants at the optimal point had happened by chance.

The reason the scandal has disappeared from the headlines, reports the New York Times, is that the government is trying to figure out how serious the crime is.

The paper reports that the SEC is split on the issue although Chairman Christopher Cox has denied this. And in something of a Catch-22, other defendants are waiting on the results from the first big prosecution against Brocade Communications to see how severe the going punishments will be. There is a settlement in place with that company but the SEC has not signed off on it.

All this means that the waiting game will continue. And there is no clear way for the commission to jump. Views on this range from the "It’s completely harmless and the market will take care of it" school to those who believe it’s a fundamental breach in corporate governance with insiders helping themselves to company money by ripping off the shareholders.

The ultimate answer will be that it’s a serious breach but the penalties will be lighter than normal because of the lax enforcement environment by both compensation committees and the government. In that light, it was easy to think that everyone was doing it and that it wasn’t really a problem even though many offending companies have restated earnings back into the 1990s.