Altera said it will make a total of $47.6m worth of restatements to its accounts going back to 1996 to correct errors in accounting for stock option grants.

A damning report by a special committee of the board has clear evidence of wrong doing by two retired senior executives and says that both the former CEO and former General Counsel received some of these in-the-money options in December of each year from 1996 to 2000.

While the report only refers to those responsible by their job title, Rodney Smith was CEO from the company’s formation in 1983 until 2000 while Wendell Bergere was general counsel from 1995 until he retired in 2001.

The inquiry discovered that between December 1996 and February 2001, there were seven occasions on which the recorded grant dates for certain employee stock option grants differed from the actual grant dates, though none of these grants was made to the current CEO.

It says that instead of granting options on the date intended by the compensation committee, our former CEO and former General Counsel chose as the grant date the date with the lowest closing price in December.

When minutes of the compensation committee and the board were prepared after the grant dates had been selected, the company found that the grant dates recorded in the minutes did not reflect the grant date intended by the compensation committee but rather falsely indicated that the actual grant date was the date with the lowest December closing price in each of the years 1996 to 2000.

The wording of the report will likely spark immediate interest from the FBI teams probing irregularities at 55 companies since reports from companies to date have tended to suggest that those involved were motivated by nothing other than an over-zealous desire to improve staff incentives.

The San Jose, California-based chipmaker also announced that Nathan Sarkisian has quit as CFO. Officially, Altera said that Sarkisian, who is 47, has retired effective August 16 but also announced the stock options inquiry concluded there had been a material weakness in financial controls and suggested remedial actions including searching for a new CFO.