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Apple Execs Reportedly Faked Options Documents

Posted by ScuttleMonkey on from the hands-in-the-cookie-jar dept.

theodp writes "Federal prosecutors are reportedly looking closely at stock option administration documents that were apparently falsified by Apple execs to maximize the profitability of option grants. While Apple has said CEO Steve Jobs did not profit from the stock-option backdating, Jobs has reportedly hired his own attorney to deal with the SEC and Justice Department."

4 of 172 comments (clear)

  1. Say it Ain't So Fred! by good+soldier+svejk · · Score: 4, Informative

    Disappointing that Fred Anderson is at the center of this. Anderson did a bang up job as CFO. He created the company's large cash reserves by liquidating unnecessary capital investments (plant), issuing a convertible debenture and selling some of their valuable ARM holdings. Then he managed the investment of those funds astutely enough to make the conversion of those outstanding notes to common stock a huge win for both the company and creditors. That 1999 conversion alone eliminated about two thirds of Apple's long term debt (conversely that means the issue had assumed most of Apple's debt). Really, this guy did an outstanding job. Apple can thank him for their sound financials.

    Now it seems the financial genius is another self-serving, crooked corporate scumbag.

    --
    It is cowardly, and a betrayal of whatever it means to be a Jew, to act as a white man

    -James Baldwin
    1. Re:Say it Ain't So Fred! by good+soldier+svejk · · Score: 4, Informative

      Convertible bonds aren't a win for existing stockholders, however, who find their stake diluted by the new issuance. To oversimplify, it would be like the US government printing money to pay debts.

      They are a win for existing stockholders if the officers use the cash to help engineer a comeback which quintuples the price of the stock, as was the case at Apple. One of the things Apple did with that money was buy NeXT.

      --
      It is cowardly, and a betrayal of whatever it means to be a Jew, to act as a white man

      -James Baldwin
  2. Way to flamebait the headline by $RANDOMLUSER · · Score: 5, Informative

    The SEC has been investigating "about 80" companies for this since July. Apple started their own internal investigation, which they're sharing with the SEC. Oh, and it's former employees who are being looked at. Oh, and maybe backdating isn't illegal, it just should be declared.

    Take a look here or here.

    --
    No folly is more costly than the folly of intolerant idealism. - Winston Churchill
  3. Re:yay, another company who's CEO's rob shareholde by gnasher719 · · Score: 4, Informative

    '' Backdating options is a legitimate accounting practice? It's never been allowed at any of the places I worked, where more than once I had options issued shortly after a huge aberrant stock spike and thus my option price was set so high that it never became profitable. I would have *loved* to have had them backdated, but had understood it was illegal to do so. ''

    A company can give you any number of stock options it wishes, at any strike price it wishes. If the strike price is equal to the share price on the day the options are granted, the company does not have to pay any taxes on the grant. If the strike price is lower, then this is treated as if the company had given you cash, so you have to pay income tax, and the company has to register the difference as a loss. So it was always legal for the company to give you options at the share price at an earlier date, but YOU would have to pay income tax for it.

    What is NOT legal is to modify the grant date and so hide the fact that taxes need to be paid.