Anderson Blames Jobs In Backdating

[MacRumors]

In an interesting twist to the high-profile stock options backdating probe that has been ongoing for over a year at Apple, former CFO Fred Anderson is claiming that he warned Apple CEO Steve Jobs about the financial and legal repercussions of his backdated option grant, and that Jobs had given him assurances that the grant was board-approved.

The Wall Street Journal (Paid Subscription Required) has Mr. Anderson's full statement, which in part reads:

Fred was told by Steve Jobs in late January 2001 that Mr. Jobs had the agreement of the Board of Directors for the Executive Team grant on January 2, 2001. At the time Mr. Jobs provided Fred this assurance, Fred cautioned Mr. Jobs that the Executive Team grant would have to be priced based on the date of the actual Board agreement or there could be an accounting charge. He further advised Mr. Jobs that the Board would have to confirm its prior approval in a legally satisfactory method. He was told by Mr. Jobs that the Board had given its prior approval and the Board would verify it. Fred relied on these statements by Mr. Jobs and from them concluded the grant was being properly handled.

The SEC has yet to respond to these specific allegations. A previous report by Mercury News indicated that there has been a lack of evidence to support criminal charges against Mr. Jobs.

Anderson has recently settled with the SEC regarding his involvement in the ordeal, having admitted no guilt but having to pay a $150,000 fine in addition to paying back the received grants. Separately, the SEC is pursuing legal action against former general counsel Nancy Heinen, which she plans to contest.

[longofest]

This makes me wonder if that Mercury News report was accurate. If it was, then the SEC may still pursue civil action against him.

[johnee]

based on what i've read, the SEC says this is false. but it's still early.

He needs to have verifiable proof or nothing will happen.

[rtdunham]

so did anderson escape jail time by agreeing to testify against jobs? i don't imagine it'll be long before we find out.

[bearbo]

i actually wouldn't be that surprised if steve did do that, just based on his confidence and all that.

but again, i'm not based on any real proof

[IJ Reilly]

Originally Posted by longofest

This makes me wonder if that Mercury News report was accurate. If it was, then the SEC may still pursue civil action against him.

The Merc News reporting was essentially a rehash of material we've seen before, presented in somewhat more detail. IMO it relies too heavily on unnamed sources to be fully reliable. It seems likely that Anderson made this statement in connection with his plea agreement. Can the SEC pursue a civil action? I don't think so.

[nagromme]

"the Board had given its prior approval and the Board would verify it."

Maybe I'm reading something wrong, but it sounds more like Anderson is "blaming" the Board, and Jobs was just the messenger in that conversation. Unless Jobs lied to Anderson about the Board's approval/verification--but Anderson doesn't seem to be saying that.

I'm sure everyone involved--guilty and innocent alike--is trying to deflect blame or the appearance of blame. I wonder if we'll ever know who REALLY acted with intent to defraud?

[johnee]

well Anderson cried mommy and settled.

Let's see if the other person who hasn't settled has something to defend her/him self with (not sure if it's a man or woman).

[Rocketman]

In listening to the details carefully, this is Andersen's post-settlement lash-out PR release so when he goes on to run his new investmnt fund, his new associates can point to somebody to explain why he had to settle with SEC.

Notably SEC justified their hands-off approach regarding Jobs by citing the immediate and full cooperation they received from Apple and all the remaining ployees there (after the key players in the drama resigned.

The whole SEC involvement in this is anti-stockholder interest and in an area (options pricing) which in effect has no "losers" in a stock with such large daily transaction volumes as Apple has. The "dilutive effect" is nearly unmeasureable and has "no impact" on the market for the stock.

So I can see why he is pised to give $35,000,000 "back". My question is who got the $35m? Apple, Apple stockholders, or the SEC. Wanna place a bet?

Rocketman

[jessep28]

As the Martha Stewart and Richard Scrushy cases show, it's often very difficult to prove intent in securities cases.

Scrushy successfully was able to pull the "I didn't order the numbers to be fixed" defense in his criminal trial. Granted there were civil matters, but he isn't in jail and his house and other items are shielded from garnishment.

Stewart just was placed in jail for lying to Fed officials and not for insider trading in the ImClone case.

Jobs is claiming of course that he didn't order the options to be backdated, that only he "discussed it" thus he should be absolved from liability and blame should be shifted to the board and Apple's lead council.

[lkrupp]

If Jobs is indicted and removed as CEO of Apple, and Apple falls by the wayside into the corporation graveyard, how long would a web site like MacRumors survive? A year? Less?

Have you guys got your resumes polished up yet?

[hob]

the first time this came up i thought "crikey, I think Jobs is done for"... but I let it go...

every time it comes up again I get a similar gut reaction...

now I'm really starting to wonder... could this all bite Steve in the ass?

[jessep28]

Originally Posted by lkrupp

If Jobs is indicted and removed as CEO of Apple, and Apple falls by the wayside into the corporation graveyard, how long would a web site like MacRumors survive? A year? Less?

Have you guys got your resumes polished up yet?

Jobs could still be retained, he just can't be a corporate officer or serve on a board.

That's what Stewart did with Martha Stewart Omnimedia.

[DaBrain]

A "he said she said" scenario. Wonder what the outcome will be. One would suspect more than a verbal accusation would be needed here if they were to charge SJ. We shall see!

Could be just sour grapes and then maybe not!

[GanleyBurger]

.
No new hardware. Silly...

[nagromme]

Originally Posted by hob

the first time this came up i thought "crikey, I think Jobs is done for"... but I let it go...

every time it comes up again I get a similar gut reaction...

now I'm really starting to wonder... could this all bite Steve in the ass?

It could--I don't know how anybody could be sure otherwise. Then again, he could fall down a well or a hundred other things. Those who seem to know more than I aren't worried about Jobs' implication, but if he DID do wrong then he should pay the price as the law dictates. He'll make it through that ordeal, and Apple will make it through his absence. Any absence would hurt Apple and its products, and I hope it doesn't come to that--but there's a lot of talent at Apple besides just Jobs, and they can follow through with the projects Jobs has overseen.

And Jobs WILL leave Apple someday, no matter what.

[johnee]

Originally Posted by GanleyBurger

.
Hey! More no new hardware news!!!

Maybe they will release hardware to distract everyone!

[johnee]

Originally Posted by nagromme

It could--I don't know how anybody could be sure otherwise. Then again, he could fall down a well or a hundred other things. Those who seem to know more than I aren't worried about Jobs' implication, but if he DID do wrong then he should pay the price as the law dictates. He'll make it through that ordeal, and Apple will make it through his absence. Any absence would hurt Apple and its products, and I hope it doesn't come to that--but there's a lot of talent at Apple besides just Jobs, and they can follow through with the projects Jobs has overseen.

And Jobs WILL leave Apple someday, no matter what.

Hence the reason I opened this thread!

Who do you think will replace Steve Jobs?

[Amdahl]

Originally Posted by nagromme

I wonder if we'll ever know who REALLY acted with intent to defraud?

Well, gee, so far the primary candidates are Steve Jobs, who is a God and controls Apple with an iron fist, and little ole CFO Anderson.. Gee, I wonder who would pull off something like this???

[jessep28]

Originally Posted by nagromme

And Jobs WILL leave Apple someday, no matter what.

Yeah, that is true. Unfortunately, i think Apple's greatness at least in the minds of many is tied to Jobs. Jobs is Apple and Apple is Jobs.

We all saw successors back when Jobs 1.0 left Apple run the company into the ground until Jobs 2.0 came in and brought the company to where it is now.

Another case - Wal-Mart. Sam Walton wanted to bring Everyday Low Prices to the masses and strived to achieve that. After he left the company, the management used Wal-Mart's power to attempt and make it a global powerhouse in the retail world.

Unfortunately for Wally World, its grown too big and is falling apart from the inside.

Many are questioning Berkshire Hathaway's future when Warren Buffett leaves.

[papadopolis1024]

Screw him he is just DUMB!


He has no proof and no explanation so I dont think anyone will look back

[Rocketman]

Originally Posted by johnee

Who do you think will replace Steve Jobs?

That guy who did the Time Machine demo hopefully.

The villian in this story is the SEC and a "zero tolerance legal culture". This could have been resolved with 10 letters and a check 5 years ago if all SEC cared about was asking the players to "bring their position to fairness". The SEC's real goal is to justify their existence in a political context through fines, actual or threatened criminal charges, and "give backs" (shakedowns) in the millions of dollars which the SEC itself absorbs. Isn't that evidence of a "second crime"? In that context it is the SEC itself "cheating the victims" of their due.

Isn't sovereign immunity great!?!

Rocketman

[LagunaSol]

Originally Posted by Rocketman

So I can see why he is pised to give $35,000,000 "back". My question is who got the $35m?

Actually, it's $3.5 million...

[twoodcc]

i think it's kinda fishy that he says this right after settling.....

[epochblue]

Originally Posted by twoodcc

i think it's kinda fishy that he says this right after settling.....

Agreed. Sounds a lot like, "Okay, I'll pay, but it wasn't me, it was.....ummm......STEVE! Yeah, Steve did it!"

Edit: To be clear, I'm not saying that Jobs isn't (or can't be) guilty. As remarkable as Jobs is, if he did this, he should suffer the consequences. I'm just saying that the situation as it stands currently is slightly fishy.