Slashdot Mirror
Apple Announces More Options Troubles
fremen writes "Apple today announced that they will be withdrawing their financial reports back to September 29, 2002 and delaying the filing of future reports after finding more backdated options problems. Companies backdate their stock options by looking back over a period of time and choosing a historical low as the option strike price. While not illegal, this must be fully disclosed to investors and properly accounted. Expect more uncertainty in the coming weeks as regulators must now uncover how much of Apple's record profits were incorrect as well as whether or not Steve Jobs will be able to continue leading the company."
Wouldn't this be an accounting issue, for the Chief Financial Officer, not the Chief Executive Officer (Jobs)?
Michael
There is no cryptographic solution to the problem where the intended receiver and the attacker are the same entity.
Who in their right mind would remove a CEO (a loved one at that) of a successful company? A company whos share price is soaring nevertheless
Being legally prevented from being a director of any company would do the trick and is a distinct possibility.
Bad news for shareholders and possibly some Apple employess, but unless this is an extremely massive problem it shouldn't really have much effect after a couple of initial punishments.
Haiku for you!
Exactly - I'm at the edge of just giving up on reading Slashdot entirely with the retarded articles coming through lately with little jabs thrown in throughout. It's always had it to a small degree, but it's just getting worse lately.
While I have no actual idea what that means I have a feeling the interpretation in the summary is a bit sensationalistic. If it really was that bad, would Apple really do it? Or are we really facing an Appleron?
Justice is the sheep getting arrested while an impartial judge declares the vote void.
The shareholders might not like tolerate things like this, but they're clever enough to know that Jobs IS Apple, and they'd lose a lot of their appeal if they made him resign. Remember what happened last time he left?
1. There's a difference. Enron was purposefully and illegally cooking their accounting books and they got caught. Apple themselves noted a discrepancy between practice and what should be reported to shareholders. Enron executives bilked shareholders out of billions of dollars. Apple granted stock options backdated at the lowest price and did not include them on a report. 2. One company self-reporting a problem does not make a trend. There are thousands of companies, and statistically I would wager that there are more than a few that have also reported similar discrepancies over the course of their existence. Thus, there is nothing stating that the CEO should have to leave his company for discrepancies filed by his own company (and the finance department, no less). Your perception is not reality. While I agree that the 'public' won't tolerate being ripped off, they also should know that this doesn't fit the 'being ripped off' scenario. I understand where you're coming from, but I don't think this is such a scenario.
This is basiclly a case of "oops we paid our executives 12 million dollars not 10...our bad"
I just love this comment..
"but as is becoming increasingly clear with Apple, that success is not to do with doing good business, rather it's just bad accounting"
have you been outside these last two years? you go on the subway or any metro and you see that 1 out of 5 people has white earbuds sticking out of thier ears.
As I understand it (IANAL, IANAA) Sarbanes-Oxley changed this. Now the CEO is required to sign a statement that the companies' financial reports are correct.
Censorship is telling a man he can't have a steak just because a baby can't chew it. --Mark Twain
Steve Jobs leading Apple
What could stop him in the long run?
The article insinuates that regulators can stop him. I doubt that's true. Unless the numbers are Enron-like, the board is very unlikely to dump him. My take on the article is that the overstatement of profits is significant, but not as significant as Steve Jobs leadership.
TW
Sometimes I think people who submit articles to Slashdot are pure idiots.
The original article makes no mention of "backdating options" whatsoever. "Backdating options" is an illegal and criminal method of giving employees more money by chosing the date of an option grant long after the option is granted, usually to a time when the stock was low. Even just with the usual random fluctuation of the share price, this can make options much cheaper and therefore more valuable for the employee. However, nothing like that was mentioned in the article at all. What was mentioned was "possible irregularities in the accounting" of the value of stock options, which was found by Apple itself in an internal inquiry that it started itself, and it was Apple who called the SEC about it, not the other way round. And since the rules for the accounting of stock options have changed a lot in the recent years and are quite complicated, it is quite possible for a company to account them incorrectly by mistake. The bit that the submitter added about Steve Jobs has been pulled out of thin air altogether, just to make it sound more interesting.
This is like Mr. Smith calling the Inland Revenue, telling them that he might have made a mistake in his tax returns, and a submitter on Slashdot calling him a thief and criminal.
"Apple today announced that they will be withdrawing their financial reports back to September 29, 2002 and delaying the filing of future reports "
Correct.
"after finding more backdated options problems. "
Incorrect.
"Companies backdate their stock options by looking back over a period of time and choosing a historical low as the option strike price. While not illegal, this must be fully disclosed to investors and properly accounted."
Incorrect. Backdating options is illegal, that's what people will go to jail for. That is also what Apple hasn't done .
Expect more uncertainty in the coming weeks as regulators must now uncover how much of Apple's record profits were incorrect "
Regulators are not involved in this at all. This is an Apple internal inquiry.
"as well as whether or not Steve Jobs will be able to continue leading the company."
Taken out of thin air.
In other words, the submitter took one line from the quoted article, then added 90 percent bullshit to it.
1. Post bogus story to /., with incorrect statements and FUD about Jobs being forced to leave Apple.
2. Wait for damage to Apple stock prices.
3. Buy cheaper shares of Apple stock.
4. Profit.
The article insinuates that regulators can stop him. I doubt that's true.
The regulators could stop him. But that's why Apple did the right thing and came forward about it, launched a third party investigation, and is trying to clear things up. The industry I work in sees something similar with export control violations. The governing agency is usually much lighter on penalties and such if you come forward about it. I imagine that the SEC operates in a similar manner. Getting audited and finding out Apple knew about it all along, but didn't do anything about it, would be far, far worse.