NEW YORK (CNNMoney.com) -- Two more CEOs hit by the scandal over stock options stepped down Wednesday, highlighting the risk to companies - and investors - stung by the backdating bullet.
The chief executives of McAfee (Charts) and CNET (Charts) both resigned Wednesday, the latest fallout in the growing scandal over the timing of stock option grants.
Some 125 firms have been linked to the stock options scandal, from blue-chip companies like Home Depot (Charts) and Apple Computer to a slew of smaller tech firms. (See table below).
"Options backdating is the 'hot topic' in corporate fraud. There are no signs at this stage of that waning," said Michael Koenig, an attorney at the Washington office of law firm Dewey Ballantine.
Stock options give executives and employees the right to buy shares at a certain price, and if the stock rises after the options are granted, profits can be fat.
Federal prosecutors and the Securities and Exchange Commission are investigating whether companies "backdated" or otherwise manipulated the dates they granted stock options to make them more lucrative.
Many of the companies involved have opened internal investigations, while others are restating results, which can mean a big hit to profits.
How the companies manage the external and internal probes - and communicate with regulators and investors - can play a big role in cutting the risk to the firms themselves, and their shareholders.
Come clean, and do it early. A lot of people involved in the backdating mess probably think not they're going to get caught, but that's a calculated risk they're taking, according to Erik Lie, an associate professor of finance at the University of Iowa whose research first cast options backdating into the spotlight.
With the list of companies hit by the options saga growing - and Lie expects the number of companies involved to grow to at least a couple of hundred - it's a good idea to get ahead of an investigation.
"It's always better to come clean, restate and settle with anybody suing the company so you can move forward as soon as possible," he said.
Reshuffle management, as needed. Whether the CEO goes depends on what they did, according to Charles Elson, the director of the Center for Corporate Governance at the University of Delaware.
Companies need to act effectively according to the results of their investigations and put procedures in place to make sure it doesn't happen again, he added.
"Anyone involved needs to be held accountable. If someone intentionally backdated options with the intent to take a gain improperly, they're not the best steward of shareholder assets," he said.
Transparency, transparency, transparency. The more open a company is about the situation, the more information investors have to evaluate whether any backdating that occurred was the work of a few isolated individuals at the company or is more widespread, or even was done with the knowledge of senior management, according to John Mutch, founder of the shareholder activist hedge fund MV Advisors.
The less a company has to hide, the better, he said, giving the example of Apple (Charts), which initiated its own investigation into stock options. "[Apple CEO Steve] Jobs came out and said 'I screwed up, we'll make it better.' He provided a lot of transparency and visibility," Mutch said.
Apple shares slipped after the company announced its internal investigation in June but have since recovered. In fact, the stock is up about 24 percent since it launched its internal probe on June 29.
Cooperate with investigators. Even though several companies have launched internal probes, they may not escape the scrutiny of government investigators.
If a company comes under investigation by the SEC, executives should plan on cooperating fully, said Koenig from Dewey Ballantine.
"It varies on a case-by-case basis, but how a company responds to these cases is a major factor in what action, if any, the government takes," he said.