has some explaining to do.

Two government agencies have started asking questions about the company's well-timed stock-option grants to corporate executives. The U.S. attorney for the Southern District of New York

subpoenaed the company on Wednesday as part of a growing criminal probe of stock-option grants across the country. The

Securities and Exchange Commission

launched an informal inquiry focusing on executive perks as well the very same day.

News of the dual probes comes three weeks after

highlighted the particularly well-timed stock-option grants that Caremark made to CEO Mac Crawford and other company leaders last year. Caremark granted those options at $37.92 a share, the lowest closing price of the year.

Last week,

The Wall Street Journal

went on to show that Caremark has displayed some uncanny timing before. Notably, the


stated, Caremark issued stock options priced at $3.88 a share -- "which turned out to be tied for the low point of the year" -- back in 2000.

Government officials are now seeking to determine whether companies like Caremark and


(UNH) - Get Report

"backdated" options in a manner that gave them lower strike prices and, therefore, made them worth more to company leaders.

For its part, Caremark has flatly denied that the company ever did any such thing. The company also stressed on Thursday that the SEC specifically stated that its inquiry "should not be construed as an indication by the SEC or its staff that any violation of law has occurred or as an adverse reflection upon any person, entity or security."

Caremark previously told

that it routinely grants stock options to its executives at the board's first-quarter meetings, even though past grants have taken place in later periods. Formal regulatory filings support the company's claim that it granted last year's stock options in March, however.

Nevertheless, Massachusetts investment strategist Peter Cohan seems to have his doubts.

"I'm really curious about how the company could know how to issue stock options at the lowest price of the year -- twice," says Cohan, who has no position in the stock himself. "The odds of that happening randomly are just phenomenal."

Investors displayed some clear uneasiness as well. They pushed shares of Caremark down 6% to $45.94 on Friday morning.

Devoted Fan

In contrast, JP Morgan analyst Lisa Gill seemed typically unfazed.

Almost on cue, Gill rushed out with a research note late Thursday -- shortly after Caremark disclosed the new probes -- urging investors to buy the company's stock on any weakness the following day. Gill claimed that the probes focused on "old issues" and expressed full confidence that nothing would come of them in the end.

"In our view, the significant media attention the issue of stock-option grants has recently generated has driven the U.S. attorney and the SEC to cast a wide net in terms of investigating the issue," Gill wrote when reiterating her overweight recommendation on Caremark's stock. "As we highlighted in a note published on April 25 (the same day

first raised its questions), we do not believe there is any validity to claims of options backdating" at the company.

In the past, Gill has dismissed similar matters -- including an FBI probe exposed by

-- when covering Caremark as well. Just this week, in fact, Gill downplayed the company's recent change in auditors and even embraced the move while telling investors to do the same.

Gill suggested that Caremark had simply switched from KPMG to Ernst & Young for logistical purposes, following the company's relocation two years ago, and had wound up with a premier health care auditing firm as a result.

"While shares could be weak -- as auditor changes are generally viewed negatively -- given the reasons cited above, we don't believe there is anything to read into this decision," wrote Gill, whose firm counts Caremark among its clients. "And (we) would view any potential weakness as a buying opportunity" for the stock.

But Cohan, for one, scoffs at the analyst's coverage of the company.

"She's a paid mouthpiece -- obviously," he says.

Gill was out of the office on Friday. Her associate failed to return a phone call from

seeking comment the analyst's consistently upbeat views.

'Troubled Company'

SEC Insight, a firm that seeks to uncover SEC investigations through open records requests, offered a far different take on the latest developments.

SEC Insight has warned repeatedly of a possible Caremark probe. Moreover, the firm strongly suspects that the probe began long before the company disclosed its recent letter from the SEC.

Caremark did not immediately respond to a phone message seeking information about any SEC activity.

"We can't help but think we're not being told the full story here, and there is almost certainly another shoe to drop," SEC Insight wrote in a Caremark update on Friday. "Between probes and an auditor change, we're now thinking restatement risk and potential for ousting of executives, leaving our 'troubled company' risk rating firmly in place."

SEC Insight continues to question whether Caremark is telling its investors everything it should. But just this month, the company offered its normal reassurances. When questioned about possible SEC activity in the company's latest conference call, Crawford promised that "if there was anything material that we would be required to report, we would have already done so."

However, Caremark's disclosure record looks spotty at best. For example, the

Chicago Tribune

broke the news about a government investigation of the company's restocking practices. Caremark later denied any knowledge of an FBI probe linked to that same case, which the government declined to pursue, essentially claiming that the company learned of the bureau's activity weeks after

first reported on it.

Meanwhile, Crawford cashed in more than $150 million worth of stock options in the months leading up to news of the FBI's involvement and the first warning from SEC Insight of a possible regulatory probe.

"Remember, we were warning of SEC investigative risk as far back as January, only to have the company pooh-pooh -- but not specifically deny -- our findings," the firm reminded on Friday. Now, "we think the SEC investigative activity disclosed after the close yesterday likely has a tail on it much longer than investors realize. ... Boy, those insiders sure were lucky they sold so much stock when they did."