spotlight on mae, 30 june 2009, page-14

cg

Not going off any precedents here, because as far as I am aware, there have only ever been a handful of cases brought, and then only about 4 or 5 have resulted in a successful prosecution.

I am going by my reading of the corporations act, and extrapolating a bit.
1. They already "own" the options- no problem there,
2. If they exercise the option while it is out of the money, this could possibly be subject to accusations of insider trading, however, I don't see anything in the Corp Act that explicitly prevents one from buying an out of the money option.