Extreme Networks'

(EXTR) - Get Report

shares slipped in early trading after the company said it had launched an internal probe into possible stock option backdating.

The Santa Clara, Calif., networking gear shop says it has formed a special committee to review grant dates and the accounting for those employee stock options. The review team has hired an outside attorney to help with the process.

The company says the

Securities and Exchange Commission

has been looking into its books, and as a result Extreme will delay its annual report for the fiscal year ended July 2.

Extreme is among dozens of companies that have been pulled into a widening federal securities fraud crackdown. Regulators are investigating whether companies and compensation committees manipulated option grant dates to yield higher stock values for executives and key employees.

Last month, Extreme co-founder Gordon Stitt took the chairman seat, and former

Sun Microsystems

(SUNW) - Get Report

hard-charger Mark Canepa was appointed as the replacement for the CEO title.

Extreme shares were down 7 cents to $3.43 in premarket trading Friday.