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Apple Execs Reportedly Faked Options Documents
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."
The purpose of a lawyer is to look after your interests while you conduct your business - they can warn you of impending trouble - and can nip a long drawn out investigation that will result in no arrests or charges right in the budd.
It's stupid to blame someone for seeking protection from abuse.
-GiH
If Jobs was aware of the problems but didn't take appropriate action it could still damage the company more than the non-story linked might imply. Essentially, Jobs has been hailed as a hero by fanboys and shareholders alike, and anything significantly tarnishing his tenure might remove some of the aura of invulnerability Apple has acquired in recent years. I don't by any means imply that Jobs' um, job is in danger, but it might complicate business partnerships and other strategic moves that Apple needs to remain competitive. iPod dominance aside, Apple's position is at least assailable, if not so tenuous as it was a decade ago. To reach its growth targets it has to navigate agreements with telecom providers like Cingular as well as convince say, Intel and Toshiba to continue to give it most-favored-nation status. Apple isn't Dell or Microsoft to expect to make demands of suppliers and partners with impunity.
Not yet, anyway, and maybe never, if the next round of initiatives (smart phone, media ventures, etc.) collapses.
Distracting Jobs and blemishing his heretofore immaculate turtleneck might have more consequences than just an easy story for everyone from CNET to AP report and re-report.
I am the one true god. However, as an atheist, I don't believe in myself. I guess I have a self-esteem problem.
You have to wonder if some laws weren't created for the express purpose of making unnecessary work that benefits the lawyers more than the public at large. The rules for stock options gets changed, an army of auditors scours the book, the lawyers are called in and the media has a field day. The public may or may not benefit from this. Auditors and lawyers are making a ton of money. Shareholders are getting soaked either way.
The price is that executives can no longer spend company money on whatever they wish. Executives cannot arbitrarily set pay. What we have seen in the past twenty years is scam to increase executive pay while simultaneously decreasing exposure to risk, while in the truly private sector, the opposite is true. The stock option is the classic example. It is marketed as a method to align the executives interest with the stockholder interest. If the stock rises, the executive gets rewarded. In reality, just like bonuses, the behind the scene negotiations guarantees the money no matter the state of the company.
In reality, these new breeds of corporations, with their bloated bureaucracy, with no other purpose than to create meaningless work that justifies it's existence, and raise prices and cut research to free enough money to pay for these non productive agents, are indistinguishable from any other massively bloated public entity. The similarities to congress, who wants to vote in a pay raise every year, but can't complete the minimum job requirements like passing a budget, are amazing.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
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.
Use one or more of the following: 1.) "We have launched our own internal investigation..." 2.) "We are cooperating with authorities..." 3.) Imply that the offending personnel have long since left the company... 4.) Imply that CEO was unaware of wrong-doing... 5.) Use the phrase "a few bad apples..." Apple can't use #5 (for obvious reasons), but they have used the other four. Sounds about as believable as Tony Snow discussing Iraq...
This is probably a great time to remind everyone that unless you, personally, have paid your attorney's retainer, he is not your attorney. If the lawyers paid by Apple could save Apple a nickle by hanging an innocent Steve Jobs out to dry, they would be obligated to point out that fact to their client, who is not Steve Jobs.
The moral of this is that even if your employer has paid for a lawyer, you still need your own lawyer, even if you really are as important as Steve Jobs thinks he is. Don't depend on your employer's lawyer to defend you. He'll sell you out as soon as it helps his client.
See what I've been reading.
Damn, that was some ridiculous fanboism. Enron was a blue chip stock, caused the biggest bankruptcy the nation had ever seen, and screwed thousands of employees and shareholders. Applauding Bush's Justice Dept for investigating is like applauding me for pooping after consuming coffee and a bran muffin. If it didn't happen, something was seriously wrong.
Moreover, it was the downfall of Enron that highlighted Arthur Andersen and eventually exposed World Com. It's not like the Justice Dept. was on some sort of corporate crime crack down. They were dealing with the blatantly obvious.
Moreover, before you start cheerleading about "all of these corrupt companies were brought to Justice," I would suggest that you look at current practices for awarding and funding contracts for security, military, and reconstruction projects.
"Things are more moderner than before- bigger, and yet smaller- it's computers-- San Dimas High School football RULES!"
Why should you object to us searching your car if you're not carrying any drugs in it?
Why should you care if we listen to your phone conversations if you're not plotting terrorism?
Why do you own a gun if you're not being attacked right now and don't plan on killing anyone?
Why are you using the psudonym "Orion Blaster" if you have the right to free speech?
Secondly, Steve Jobs hired an attorney, singular. Not "an army of lawyers". Thanks for playing the exaggeration game though.
If some documents have been faked, there must be others. Just like if some music on your PC is pirated, you must have stolen all of it...
Yes, the backdating of stocks, the result of which gave MORE money to executives, caused Apple to be MORE profitable. [rolleyes]
Enron's issues were more than "cooking the books". The media portrays the entire Enron mess as a few guys changing a bunch of numbers in a ledger and a bunch of shredding of documents that proved their numbers were wrong. It goes further than that, into the realm of coercing power plant managers and tampering with the energy market itself. Remember those rolling blackout in California a few years ago? Those had nothing to do with an actual shortage of energy production ability verses demand in the summer months.