WASHINGTON — The U.S. Securities and Exchange Commission will reportedly issue a statement as early as next month clarifying its policy on when U.S. law allows backdating of stock options.

Meanwhile, lawmakers are calling for tighter scrutiny of stock options.

In a published report in the Washington Post on Wednesday (June 14), SEC Chairman Christopher Cox was quoted as stating in an interview that "We will issue guidance on the backdating of stock options that will more clearly circumscribe the bounds of acceptable conduct."

The agency is under pressure to act after dozens of companies announced they are being investigated by U.S. regulators for the possibly illegal backdating of stock options. The widespread practice involves picking a date when a company's stock price reaches a low point as the date of a compensation award, guaranteeing a profit.

According to the Post, Cox has said improper backdating of stock options can erode performance incentives that stock option awards are supposed to encourage.

Lawmakers are also urging closer scrutiny of stock option abuses. Sen. Charles Grassley (R-Iowa), chairman of the Senate Finance Committee, said during a Tuesday hearing on the growing scandal that he has asked the Justice Department to determine whether U.S. laws are sufficient to prosecute stock-option backdating abuses.

"It's one thing for an executive to make big profits because he's improved his company, but it's a whole different thing to make big profits because he's playing fast and loose with the dating of stock options," Grassley said in a statement. "If the tax laws are inadequate, I want to beef them up."