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Apple Stock Options Fallout Continues

Remember Jobs is a drop out so he may not really have known what the legal ramifications were.

I'd hire a lawyer too.Especially if I'd signed off on one of the documents but didnt really know it was illegal until a few months ago.

Jobs will get out of this.

AAPL might not though.
 
Peace said:
Remember Jobs is a drop out so he may not really have known what the legal ramifications were.

I'd hire a lawyer too.Especially if I'd signed off on one of the documents but didnt really know it was illegal until a few months ago.

Jobs will get out of this.

AAPL might not though.
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Could this be the end of the iPod as we know it? My goodness. I need to worry now.
 
IJ Reilly said:
It does sound suspiciously like the Ken Lay defense. The SEC recently changed their rules to make it far more difficult for a chief executive to plead ignorance on financial matters, but I don't think these rules apply in this instance, either because of the dates when the grants occurred or because of the nature of the violation. Either way, I haven't heard anyone in the know say that Jobs is in any serious danger of being strung up.
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These grants were from 1998 to 2003 before the rules change.

It may have been in another article where I read about the back dating being legal. Perhaps also only before the rules change.

As I recall the rules change is what prompted Apple to go back and start restating/reevaluating.

As for Jobs being in trouble I don't know. Odds are he did nothing wrong and even if he did he may not have known it. There are certain instances where ignorance of the law is an excuse and accounting tends to be one of those areas.

Just a little humor.

What's an Auditor?
(Some one who follows along after a battle, bayonetting the wounded.)
What's a Lawyer?
(Some one who follows an auditor looting the bodies.)
 
Didn't we know about this months ago? What's changed? Looks worse than I originally thought, but I'm still guessing they get a fine and a slap on the wrist. This isn't Enron here. There have been some other companies that have similar issues, happened to Dell too, but I hate how everyone is making such a big deal out of this just because it's Apple.

Of course, if I'm wrong and there were some shenanigans going on, I hope they are dealt with.
 
solvs said:
Didn't we know about this months ago? What's changed? Looks worse than I originally thought, but I'm still guessing they get a fine and a slap on the wrist. This isn't Enron here. There have been some other companies that have similar issues, happened to Dell too, but I hate how everyone is making such a big deal out of this just because it's Apple.

Of course, if I'm wrong and there were some shenanigans going on, I hope they are dealt with.
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Now there is talk of falsified documents and there is the impending restatement.

according to this.

http://www.biz.uiowa.edu/faculty/elie/backdating.htm

It is provisionally legal to backdate options under certain conditions.
 
MongoTheGeek said:
These grants were from 1998 to 2003 before the rules change.

It may have been in another article where I read about the back dating being legal. Perhaps also only before the rules change.

As I recall the rules change is what prompted Apple to go back and start restating/reevaluating.

As for Jobs being in trouble I don't know. Odds are he did nothing wrong and even if he did he may not have known it. There are certain instances where ignorance of the law is an excuse and accounting tends to be one of those areas.
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Right, thanks -- that explains it.

Good jokes. Appropriate. :)

solvs said:
Didn't we know about this months ago? What's changed? Looks worse than I originally thought, but I'm still guessing they get a fine and a slap on the wrist. This isn't Enron here. There have been some other companies that have similar issues, happened to Dell too, but I hate how everyone is making such a big deal out of this just because it's Apple.

Of course, if I'm wrong and there were some shenanigans going on, I hope they are dealt with.
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We did. The only apparent difference is the suggestion that some sort of intent might have been involved, as represented by falsified reporting. Who ever doubted intent?
 
I was in accounting a long,long time ago.

It's one thing to backdate a couple months in order to give more options to a new employee but when you go back to a time long before official earnings reports thats called falsification.Doing so is illegal.It's commonly referred to as cooking the books.

But we've known about this for a while now.This is the media jumping on the bandwagon.Nothing has changed.Just because Jobs got a lawyer doesn't imply he's in trouble.He just wants to make sure the Feds do things legally and in correct fashion.
I'd do the same thing if I was innocent of something and had the feds wanting to show off for King George.
 
MongoTheGeek said:
It is provisionally legal to backdate options under certain conditions.
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This was more-or-less my understanding. If an company wants to grant "in the money" options to employees, then they have to record the difference between the option's strike price and the current market value as an expense. Back-dating isn't necessary to do this if everything is above-board. But as the article makes clear, back-dating of stock options is generally an attempt to hide the expense, so in reality they are rarely above-board.
 
skunk said:
Though he probably signed off various documents, he is claiming that, being no accountant, he did not know the accounting implications. Seems a bit disingenuous as a defence, but unless there's a paper trail showing otherwise, I'd say he'll probably get away with it.
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I'd have a hrd time believing it to...if he had benefited from it.
Why, in such a hi profile position and company would you commit something so illegal that could harm you and the company you just became the CEo of, without actually getting any benefits yourself?

If indeed he gained nothing from these "errors", as both sides are saying, than I'm not inclined to think he was intentionally involved.
 
Apple Stock Options Fallout Continues



With Apple's annual SEC statement due Friday and the pending restatement of historical financial statements, Law.com reports that Apple may be under increased scrutiny by the SEC due to apparently deliberately falsified documents by company officials to maximize the profitability of option grants to executives.

In June, Apple began an internal probe of stock option grant "irregularities", the results of which saw the departure of former CFO Fred Anderson from Apple's board amid findings of "serious concern" regarding two former officers. Law.com labels Anderson and former general counsel Nancy Heinen as those former officers.

Over 100 companies including Microsoft, CNet Networks, Intuit, and Computer Associates are in similar situations, and the falsification of documents appears to be a key element under scrutiny in SEC investigations which may lead to criminal charges.

"When there are falsified documents, the government views them as an intent to defraud, because people generally don't falsify documents unless they're trying to make things different from reality," said Keith Krakaur, a partner at Skadden, Arps, Slate, Meagher & Flom in New York working on backdating cases. [...]

Krakaur and other defense lawyers -- including several in San Francisco who asked to remain anonymous for fear of affecting local probes -- said government lawyers are focusing on falsified records as a means of proving that executives knew their actions were wrong. "They view that as intent," he said. (Ed Note: Krakaur is not personally involved in the Apple case)
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Current officers including CEO Steve Jobs were largely cleared from involvement by the independent investigation. Still, it appears as though Jobs has sought independent counsel beyond Apple's lawyers in dealing with the matter.
 
Was certainly a roller coaster ride for AAPL today. Finished up $0.01 but was down as much as $4.74. Typical Wall Street over reaction.
 
rdowns said:
Was certainly a roller coaster ride for AAPL today. Finished up $0.01 but was down as much as $4.74. Typical Wall Street over reaction.
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They probably saw the news, but then realized that Apple scored BIG in holiday sales, and they therefore realized that is the most important. :D
 
Can someone refresh my memory? Did Apple bring these irregularities to the SEC's attention, or were the irregularities discovered by a prior SEC investigation?
 
sbrhwkp3 said:
At least it seems like a common thing, and Apple won't be the center of attention about it...
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The common thing is to make millions while screwing the workers and cooking the books. Enron,GM,Exxon, and even Apple are all ran by greedy corporate pigs. Its like Congress giving itself 10 raises in a row and voting down a minimum wage increase every time. These guys all suck if you ask me.
 
I think it was another intentional hatchet job. Always an anonymous source. They have known about this restatement for months. This one was as blatant as Forestor's report a few weeks ago about iTunes sales slumping severely based on looking at credit card statements...lol.
 
If apple did wrong, they'll get their punishment. Simple as that; it is not a conspiracy crafted by Bill Gates to destroy apple, its just something that happens when there are laws concerning corperations that aren't that strictly enforced.

People realize they can break them without getting in trouble, and then suddenly the agency in charge of the laws realizes that people are breaking the rules and they should probably do something about it, and situations like this are born.

This is not another Enron, and Apple will make it through this for sure, baring any new major(ly) bad developments.
 
Dont Hurt Me said:
The common thing is to make millions while screwing the workers and cooking the books. Enron,GM,Exxon, and even Apple are all ran by greedy corporate pigs. Its like Congress giving itself 10 raises in a row and voting down a minimum wage increase every time. These guys all suck if you ask me.
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I am sure you have evidence that Apple has been "cooking the books". I am looking forward to a link.
 
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