RSSApple Options Investigation May Implicate Steve Jobs
By Scott M. Fulton, III | Published December 28, 2006, 12:54 PM
A report in this morning's Financial Times, following up on a story in a California legal journal posted to Law.com on Tuesday, states that 7.5 million stock options at an exercise price of $18.30 per share were granted to Apple CEO Steve Jobs without authorization from the company's Board of Directors. The report states that documents were later falsified to make it appear as though the Board did approve of the grant - a practice whose penalty could involve huge fines and jail time.
Tomorrow is the deadline for Apple to produce a delayed 10-K filing for the US Securities and Exchange Commission, whose balance sheets could be adjusted to account for previously unstated expenses involving the granting of options during 2001. Up to this point, Apple's representatives have maintained that Jobs never exercised those options that were granted him, instead trading them in for legitimate securities.
But if Jobs was aware, even though he never cashed in, that these options were granted without board approval, his failure to report that fact to the SEC may make him criminally liable. Reporter Justin Scheck of the California law journal The Recorder revealed on Tuesday that Jobs had hired legal counsel outside of Apple.
According to The Recorder, the falsified documents were turned up in the course of a three-month internal Apple probe, which may have implicated two former high-ranking officials: former CFO Fred Anderson, who retired in 2004 and resigned from the company's board just last October; and former vice president and general counsel Nancy Heinen, who came on board with Jobs after Apple's acquisition of NeXT. Heinen's departure last May could be the most controversial, with the company having stated almost no information explaining her reasons for leaving, and with her timing alone generating suspicion.
If the SEC treats Apple with the same level of attention as with the other 100+ corporations implicated in its stock options backdating investigating, the implications for its current and former executives could be devastating. Last August, former Brocade Communications CEO Gregory Reyes and human resources VP Stephanie Jensen were indicted by the US Justice Dept. for their alleged personal involvement in a scheme to compensate employees using unreported options - a scheme which allegedly involved fraud and document falsification. If convicted, they each could face prison terms of up to 20 years, and fines of up to $5 million USD.
As for the company itself, however, Brocade was not charged for corporate wrongdoing. As the San Jose Mercury News reported last week, since Brocade has restated its earnings, its health and stock value have been on a rebound.
Some analysts today continue to see the Apple affair as overblown, with a UBS analyst saying just yesterday he expects the company to begin putting the whole affair behind it, with the filing of its delayed 10-K report tomorrow.
Meanwhile, investment advisor and Seeking Alpha blogger Phil Davis dismissed the FT story this morning as basically a reconstitution of news that was already out there, pointing to the fact that the story was written in San Francisco as indication of a possible anti-Apple agenda. "We made a lot of money on this nonsense yesterday, and we will exercise caution," Davis wrote, "but let's be on the lookout for another great opportunity today as all this negative Apple news seems very oddly timed ahead of MacWorld."
But late last October, when it first appeared Steve Jobs' unmistakable image could not escape the spotlight of scrutiny, Strategic News Service newsletter editor Mark Anderson predicted that Apple may have to find someone convenient to blame if it intends to save its CEO. "I expect that the company is doing its best to find fall guys and scenarios that will allow Steve to stay," Anderson wrote. "Apple, I am afraid, has a real problem, the only problem that it can't work around. It is trying, but time does not, in fact, heal all wounds. I've come to the tentative conclusion that Steve was involved."
"We have a company that cannot prosper without Steve," Anderson stated. "No Steve is No Option for Apple."
Steve Jobs (and Apple) is too hostile and proud for my liking. So I won't be particularly sad to see him behind bars.
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I would really love to see that douche bag Jobs end up in jail.
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I though Steve Jobs was different from Gates, who would steal technology from his own mother.
Expect shares to take a nose dive.
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yes Jobs is different.. he steals from his stockholders. Gates,on the other hand, has devoted his life to spending his money trying to help the disease, poor and disinfranchised. I'm not saying Gates is an angel but name on e thing that Jobs has done with all his money for the betterment of humankind.
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Competed with Microsoft. :p
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Why do people always have this opinion of Microsoft?
Its the way of so many businesses. See what another business is doing and do it better. I think the issue is that Microsoft just does it better in most cases.
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At the end of the day, it's not just about making a lot of money but about what you do with the money. Job buys jets and Gates gives billions to the poor. As far as operating systems, I could care less. They all have their pluses and minuses. Finally, 4% share of the market doesn't constitute a great deal of competition. Also, Apple will be in big trouble in the next few years as the market is flooded with music players. Of course, just like in the 90's, Jobs will probably leave before that happens so he can say it wasn't his fault. BTW. Jobs was a major contributor to Al Gore's run for president. Can anyone say "conflict of interest?"
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I'm preatty sure Jobs was kicked out, he didn't 'leave'
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What's wrong Pc_Tool? can't keep up the banter with someone who could run circles around you blindly drunk? You remind me of Tim the Tooltime Tailor with all the intelligence of a pisant.
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It's over 6% and growing at over 30%/year
And the market is already flooded with music players - hasn't hurt Apple.
--->Finally, 4% share of the market doesn't constitute a great deal of competition.
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On the contrary, Forbes estimates it at only 4% and Apple's own guidance on their conference call with investors says there would be a slowdown in IPOD sales. So, stick that in your pipe and smoke it. For the record, I use an Apple so I'm not one of those MS fanatics
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....
Can you say:
"Whoosh!"
Get a step stool, or something dude...and maybe some Prozac.
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Dude, seriously, chill. I am usually the one defending MS, so shelve the holier-than-thou BS.
Learn to take a joke and settle the fsck down.
...though I must admit it *is* fun to watch you people get your panties in a twist over a comment like that.
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Sure didn't take ya long to jump on the flame-wagon though, did it?
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you settle down but then children sometimes need a drug to do that. You can dish it out but not take it. Like most crybabies on this site whether their apple, ms, or linux suck-ups, you want to drown out other voices but your own. Just listen to the voices in your head- I'm sure they'll keep you busy.
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people will often times envy those at the top, often they know not why, other than someone telling them to do so. Sheep mentality :D
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Wow.
Wanna argue intelligently? Fine, start being intelligent and we'll have a go at it.
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PC_Tool? If you're going to talk about mental health drugs then at least get it right. Prozac is an anti-depressant. What I need is an anti-anxiety drug like Ativan. Yum! Yum!
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I prefer thongs to panties. Love the feel of that piece of string scratching my A**.
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Um....
Allrighty then.
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Sodium Pentathol. Definitely. ...and not some pansy "Truth serum" dose, either.
That should solve the problem. :p
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Apple is a great company, plagued by the common greed of the corporate world. Don't worry..., they are not the only one.
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Interesting take on that idea here: http://biz.yahoo.com/see...1228/23176_id.html?.v=1
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Right now the SEC is investigating 160 companies and microsoft is not one of them. The business accounting rules changed when options became a big thing during the dot.com speculative bubble.
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MS, unlike 160 other companies has not had one sniff of wrongdoing in this area. Besides, I wouldn't put much stock in a company (Yahoo) that helps the chinese put dissidents in Jail.
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Steve Jobs and Apple are now under serious investigations for forging back-dated options. This could cost them a lot of money and land Steve Jobs in jail. Instead, Betanews ran an article about Gerald Ford passing away. I suppose they will tell us he invented the internet.
One good thing if Jobs goes to jail is that he can develope a new mac that pluds into his a** since he'll be spending a lot of time bending over. They could even call it the A**Mac.
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But you are commenting on an article about the Jobs/Apple investigation, so clearly BN did write about it yes? BN can post more than one story a day agreed?
"One good thing if Jobs goes to jail is that he can develope a new mac that pluds into his a** since he'll be spending a lot of time bending over. They could even call it the A**Mac."...now thats kinda funny.
Also note, Al Gore invented the Internets, not Gerald Ford :)
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It's amazing what the government allow all those power corporations getting away with. 7.5 millions options, that's 75 million shares. Make the math simple for most of you, it's 10% of the company.
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So let me get this straight the next Mac World will be titled “Mac World Behind Bars”?
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What will the next Mac TV commercial be now?
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The commercial's slogan may be "Mac The Bars are waiting for you" or "Mac don't let the bars stop you"
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Thank you for restating what a thousand other articles already stated. Ohh, thank you for mentioning that all of this was disclosed in October.
Did you or any of your buddies buy Apple stock at a discount? I am sure someone did.
Do some real reporting for once, instead of copying non-sense from everyone else.
Sheep heard mentality will never end.
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Was that an intended pun?
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Here we go again...
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"But if Jobs was aware, even though he never cashed in, that these options were granted without board approval, his failure to report that fact to the SEC may make him criminally liable. " (emph. added)
Lot's of "if's" and "maybe's", all based on possibilities.
Let's take this at face value, folks--nobody is saying Jobs IS going to jail here...yet
"Some analysts today continue to see the Apple affair as overblown, with a UBS analyst saying just yesterday he expects the company to begin putting the whole affair behind it, with the filing of its delayed 10-K report tomorrow."
So we still don't know anything. Granted, this is newsworthy, because there certainly alot of smoke. There may come a point where we find out there is indeed a fire here, but for now it is just smoke.
I'll hold off on making judgements for or against Apple or Steve until we find out some more details about this...
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Let's see. Steve Jobs receives 7.5 million options which have to be approved by the Board of Directors. Steve Jobs IS on the Board of Directors. He SHOULD be very aware whether the options were approved or not!!!! But they'll just make Fred Anderson and Nancy Heinen the fall guys. Crook Jobs will keep his squeaky clean reputation again!!!
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"He SHOULD be very aware whether the options were approved or not!!!! "
Of course. However, the questionable statement is this one:
"A report in this morning's Financial Times, following up on a story in a California legal journal posted to Law.com on Tuesday, states that 7.5 million stock options at an exercise price of $18.30 per share were granted to Apple CEO Steve Jobs without authorization from the company's Board of Directors."
Stop. Taking. Every. News. Article. As. If. It. Were. God. Given. Truth.
I don't take anything at face value until I find out where they come up with their conclusion. The Finiancial Times is capable of making a statement that could be less than truthful, no?
I'm not saying it is or that it isn't--only that at this point I'll wait for more to happen, or basically when there is more substantial proof for or against these rumors.
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Well said.
I hope the press keeps going nuts with this; Apple stock might present a nice buying opportunity in a couple of weeks.
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So, true...
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