The whole point of a roth IRA is that taxes are paid on the assets before they are added and the investment becomes exempt from capital gains. I'm guessing the

The whole point of a roth IRA is that taxes are paid on the assets before they are added and the investment becomes exempt from capital gains. I'm guessing the law applies to the act of adding the options rather than exercising them, so if he paid income taxes on them and the statue of limitations have passed he is in the clear.