Here is an eye-opening interview between Business Week and Daniel Warmenhoven, who is chief executive of a major Silicon Valley company, Network Appliance.

In it, Warmenhoven says the SEC's investigations of companies for improper accounting and disclosure of stock-options grants has become a "Witch Hunt."

This whole scandal has become a concern for many innocent employees who got back-dated stock option grants from their companies even though they had nothing to do with the company's decision to do the back-dating, so we know Warmenhoven is speaking to friendly troups here.

Frankly, though, we're surprised that Warmenhoven wants us to just sweep it under the rug and forget about it. He says the SEC's role is to build investor confidence. Well, isn't this investigation designed to do just that?: To make sure companies abide by laws, and disclose what is required to be disclosed? What do other people think of the whole interview? We're confused by the logic in the second answer below. If the problem has gone away, then companies won't be found doing anything wrong, right? Let us know.

BW: What's your overall sense of the stock options scandal? W: I think it's become a witch hunt. I think the government is looking to find some egregious examples [of wrongdoing] and to publicly hang people for them. That's fine. But where does it stop? I'm not saying the past practices were all good. But I thought the SEC's role was to build investor confidence. What they're doing right now is destroying it, and I don't see the purpose. They're penalizing today's shareholders for events that occurred five years ago. But who is this protecting, exactly? With Enron, every shareholder in the company lost money. The same with Qwest, and with MCI-Worldcom. But I don't know who the injured party is here. BW: The victim was the investor, who was not getting accurate information about the options their companies were doling out. And in the case of backdating (in which shares are granted at prices below the market price on the day of the grant, guaranteeing the recipient paper profits), insiders were getting a better deal on shares than the company's public investors could get. W: First of all, backdating options wasn't illegal. You just had to make sure you disclosed it and properly expensed them. And the laws have changed since [then]. Now, [because new regulations compel companies to expense all options, not just special cases like backdated "in the money"options], the basic fraud issue has by definition gone away. And let's not forget that most companies' options vest over four years, so most of the guys who got these grants in 1999 and 2000 never got a chance to cash out anyway (since most tech stocks are trading far below even the backdated prices).