It bears repeating that financial self-interest is the organizing principle of modern, free-market economics, so it generally is regarded as a good thing. It tends to make people both diligent and productive, and it serves as a self-regulating driver for both risk taking and risk aversion. The difficulty comes when self-interest morphs into greed.

Some may recall that the villainous character of Gordon Gecko in the 1987 movie “Wall Street” was modeled after the disgraced arbitrageur, Ivan Boesky. In one of the movie’s best art-imitates-life moments, Gecko proclaims: “Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit.”

Right. It also leads real-life people like Boesky to pay $100 million penalties to the Securities and Exchange Commission to settle insider-trading charges.

There will always be Boeskys in this world, and sometimes — often, we can hope — they will be caught. What’s a surprise, though, is the apparent frequency with which corporate executives and the boards of directors that pay them have been crossing the line.

The news of the past week underscores the severity of one particular example of how greed has infected the boardroom: the granting of stock options.

Options are the compensation currency of choice in the rarefied air of the corporate suite. If used properly, they permit prospering companies to boost the paydays of their most-favored officers and employees in a big way and at a relatively low cost. That’s because an executive can buy shares at the price granted by the option even though the stock has risen in value. The difference can be a huge windfall to the option holder.

Even when used in an above-board fashion, options can be seen in some cases as problematic, if not abusive. First, every grant of stock eventually dilutes the value of outstanding shares held by the public and the voting rights of those shareholders. Second, until recently, companies could avoid recording options as an expense, so long as the option price was the same as the share price at the time of the grant. But options aren’t free money, and despite complaints, accounting rules now require them to be put on the books.

What’s become clear is that hundreds of companies — possibly one-third or more of those who use options as a form of compensation — were backdating their option grants to push the so-called exercise price as low as possible and boost the holders’ eventual gain. And guess what? That might not be illegal, even if it looks to all the world like stock manipulation, a.k.a. Fraud 101.

“Purposefully backdated options that are properly accounted for and do not run afoul of the company’s public disclosure are legal,” is how SEC Commissioner Paul Atkins put it in a July 6 speech. But then Atkins seems to think that, at least in principle, backdating is perfectly fine — beneficial even. Yikes.

Atkins’ views notwithstanding, last week the SEC and the Justice Department brought what promise to be the first, but not the last, criminal charges against corporate execs for backdating options. The alleged fraud in this case involves forged documents and accounting misstatements by a Silicon Valley company, not the timing of the option grant itself. Scores of other investigations are under way.

Research by University of Iowa finance professor Erik Lie and his Indiana University colleague Randy Heron found that perhaps 30 percent of all companies that made employee option grants from 1996 though 2005 manipulated them.

A rules change by the SEC requiring prompt filings has cut down on the ability of companies to backdate options, Lie says, but hasn’t stopped the practice. “We will never see the full iceberg,” he says.

The thing is, even if fraud investigations catch some of the crooks and even if the rules are tightened to make it more difficult for companies to be deceptive, options still have a taint about them.

That was clear in a report last week by The Wall Street Journal that showed as many as 91 companies took advantage of the stock market slump in the aftermath of the Sept. 11 terrorist attacks to grant options to their execs that were guaranteed to jump in value by 15 percent or more as soon as the market recovered.

Contrast that with the behavior of some Wall Street chieftains on Black Thursday, Oct. 24, 1929. As stock prices plummeted, these financiers bought shares at a premium — meaning they risked huge losses — to reinsure ordinary investors and prevent a complete collapse in the market.

The important point is, the folks who put their money on the line in 1929, and who easily could have bailed out and walked away, were really acting in their self-interests. They tried to save the system after a fashion because they understood the nasty consequences of greed.

Contrast that with unpatriotic capitalizing on a national disaster.

Like the scorpion that drowned when he couldn’t stop himself from killing the frog that was his safe transit across the river, maybe greed is just in the nature of the beast. But someone needs to redraw the line and reinforce the quaint notion that self-interest is supposed to be a brake on excess, not an excuse for it.