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.
MAE Price at posting:
27.0¢ Sentiment: None Disclosure: Not Held