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The SEC Is Getting Closer To Jobs
Strudelkugel writes "CNN is reporting that Apple's ex-CFO warned Steve Jobs about backdating options. From the article: 'Apple's former finance chief Fred Anderson blamed Apple CEO Steve Jobs for a 2001 stock option grant that was backdated, according to a statement from Anderson's lawyer released Tuesday. The statement was released by Anderson's lawyer, Jerome Roth, after Anderson settled with the Securities and Exchange Commission related to Apple's stock option plan without admitting or denying any wrongdoing.' This is serious business. It is quite possible that the SEC could someday require Jobs to resign from Apple."
Bring on the iPod clones!
The iMac clones!
The Powerbook clones!
Ring the death knell, only Steve Jobs has imagination. Oh no!
He can still run it from the shadows.
A feeling of having made the same mistake before: Deja Foobar
If Jobs has a good lawyer, and doesn't make the 'Martha Stewart' mistake of lying to federal investigators, then the worst thing that will happen to him is a hole in his wallet.
You can't talk about Wikipedia's flaws on Wikipedia
Jobs may or may not have violated the SEC's regulations but he's hardly what I would call a bad guy. This backdated option stuff was almost industry standard and, when it started, wasn't exactly illegal. OK, so it wasn't exactly legal either but corporate lawyers were giving it the OK. The guys at RIM are getting tarred with the same brush and as far as I can tell, they did nothing wrong. The question should be asked: "Did these individuals get any money to which they weren't otherwise entitled?" If not, get off their case.
The SEC should spend some time going after some real bad guys: SCO for instance.
You can see from today's AAPL chart that the average investor thinks this overblown. The dip and the quick recovery occurred when the news about this accusation came out.
I can't see them asking him to step down, before he straight-up hands over the reigns to someone else before shit hits the fan.
"Please, shut up. Just when I think you can't say anything more stupid, you speak again." -Archie Bunker.
Like Martha Stewert, what the hell do they have to gain by doing this? They are already as rich as anyone needs to be. His net gain is probably the equivalent of me finding a penny on the street.
"This is serious business. It is quite possible that the SEC could someday require Jobs to resign from Apple."
Thank you for your editorial...
As an extravagantly paid consultant. Who in their right mind thinks that they're going to let him go, unless the law puts a total barrier between Apple and Jobs?
Despite all our criticisms as techno-nerds about Steve Job's "reality distortion field", I think that we can agree that this man is the best person to remain head of Apple. One might argue that he is overpaid, but, with that said, this man can sell their products like no other. I think his fate should be to pay back whatever ill-begotten gains this dirty trick gained him, plus fines, and he should remain in his current position.
Jobs probably won't be forced to quit by the SEC. From today's WSJ coverage:
"The SEC said it will not pursue any further action against Apple itself, which cooperated fully with the probe"
Looks like shit's about to hit the fan for ol Jobs
They'll lose no time going after Jobs for piddlin' crap, but will they touch SCO for their OBVIOUS pump 'n' dump stock scam? Nooooo...
Gutless wienies.
"I might have made a tactical error in not going to a physician for 20 years." -- Warren Zevon
and since an entire industry was doing it, it makes it ok?
i dont think thats what america is supposed to be about. rich people should not be able to steal millions while the poor are locked in jail for years for stealing a few hundred.
From what I can find about his daughter, I don't see this as likely considering: A) She's soon to turn 29 B) From what I can see she spent at least part of her child hood living with Jobs and his wife (her step-mother)
Run for President, fix the economy, the political system and world strife then pardon himself. He's got my vote.
"God fights on the side with the best artillery." - Napoleon, Marshal of France - speaking truth to power
"Hello, this is Norddest Airways RapidExit Request Hotline, my name is Danielle-Shawnee-Alisa-Moonshine, where do you wish to fly today?"
"Hi, eh, Moonshine, my name is Steve Jobs and I need a ticket to anywhere overseas, on the next plane out of Dodge - what've ya got?"
"Yes Sir, Mr. Jobs...let's take a look at the latest departures and see what we have - the next flight, which leaves in 42 minutes, is for Guatemala, via Houston...how does that sound?"
"...no good - anything direct?"
"Well, we do have a flight leaving in one hour and fifteen minutes for Abu Dhabi. It is an 18 hour flight with one carry-on and one hand-truck allowed only - how much cash did you intend to take with you?"
"How much cash? Are you kidding? All of it, of course!"
"I see. Well, Mr. Jobs, there is a $75,000.00 fee for anything over 28 kilos, which must be paid at the gate, in..."
"No problem! - Book it!"
Note that this whole Apple stock "scandal" is about something that isn't even illegal. The only thing they did wrong was to file taxes on the stock issues incorrectly, which is wrong, BUT they self reported to the SEC and the IRS. There absolutely no evidence of any intentional wrongdoing.
I say both are more related to the US Attorney purge than anything else. The Chair of the SEC is trying to "do his job" by applying heat to prominent liberal democrat contributors (which stewart, and jobs and Apple are). That's what I think is going on.
You don't get rich by turning down "free" money.
*cues Jaws theme music*
Do you inspect a roller coaster everytime you ride it?
...Jobs can just claim that the backdating was the result of a really badly screwed up DST patch.
Have gnu, will travel.
What do you expect from a guy who parks in handicapped stalls? The only thing is, if he removed from the company, I hope Steve Balmer, Larry Ellison and most other CEOs are required to resign at the same time. In Microsoft's case, its clear that all top executives allowed the company to break antitrust laws in a way that was repeatedly pointed out to them by US government. It's high time to make upper management responsible for any lawbreaking by their firm. In my opinion, this would make running a huge company impossible and this is a good thing. You should personally know the people working for you and take responsibility for who they are and what they do.
The U.S. Securities and Exchange Commission made the following announcement today:
SEC Charges Former Apple General Counsel for Illegal Stock Option Backdating
http://sec.gov/news/press/2007/2007-70.htm
...if backdating was patented already. Meaning, submarine patents are more destablizing than financial caught-in-cookie-jar.
Table-ized A.I.
Mac: "PC, I felt a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced."
PC: "Oh, that was the door to courtroom slamming shut. There are six Mac users out in the hallway singing Jonestown's Classics..... Hey mac, is this Gatorade??"
boycott slashdot February 10th - 17th check out: altSlashdot.org
SEC could someday require Jobs to resign
Would he then change his name to "Steven Pinkslips"?
Table-ized A.I.
Introducing the iFraud (tm)
Apple is currently negotiating the trademark, reportedly still held by Enron.
Remember, this is all for the benefit of the shareholders. They will be so much better off once he is gone.
Since when? Either they press criminal charges or they do not. But even if they do and found guilty there is no power in the law I am aware of that can force someone to resign their position. IANAL, but if such power is in the hands of SEC it is clearly pernicious.
Where's the "haha" tag?
"The SEC Is Getting Closer To Jobs"
Oh, really? SEC won't file stock options case against Apple; cites company's 'extraordinary' cooperation
Sorry, Apple-haters.
He didn't have to admit to any of his own wrongdoing. He was too busy admitting to Steve Job's wrongdoing to help Steve out. Isn't it great when you staff is so helpful?
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
What is it with rich people always getting discounts on things.
Can you be Even More Awesome?!
you could just grow up and stop believing in ponies. Not being able to run large companies would destroy our economy. Its far more worth it to our society as a whole to allow a few executives to go overboard with their power than it is to totally wreck our national economy and throw millions out of work. The rest of the world isn't going to put a number of workers cap on their companies and they'll eat our lunch.
So no, you should not have to personally know each and every person who works for you. Thats just retarded.
Mac OS X and Windows XP working side by side to fight back the night.
"Fred Anderson has a long-standing impeccable reputation and is widely regarded as one of the most ethical CFO's in the nation whose extraordinary contributions to Apple's success during his eight-year tenure are unquestioned. He is accurately recognized by many current and former Apple employees and throughout the industry as a man of exceptional ability, achievement and integrity. "With respect to today's announced settlement by the SEC of its complaint against him, Fred is pleased to put this matter behind him. "In the settlement Fred makes no admission or denial of the claims by the SEC. The terms of the settlement permit Fred to continue to act as an officer or director of public companies and do not bar him from practicing before the SEC. The claims against him also do not include fraud under the two antifraud provisions of the securities laws requiring proof of knowing misconduct. "With respect to the Executive Team grant that is the subject of the complaint against him: * 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. * Fred understood that, under Apple's stock option plan and accounting rules at the time, a grant date could be moved to a later date than the date of the actual grant decision and that there would be no compensation expense as long as the stock price on the new date was higher than the price on the original date. Apple's 1998 Executive Officer Stock Option Plan provided in Section 16 that 'The date of grant of an Option...shall be, for all purposes, the date on which the Administrator (in this case the Board) makes the determination granting such Option...or such later date as is determined by the Administrator '. Mr. Anderson understood that the date of grant was to be moved forward pursuant to this provision from January 2 to January 17 to avoid any appearance of impropriety that might arise from a grant awarded just prior to the stock price rise that resulted from the 2001 MacWorld exhibition and Mr. Job's keynote speech at the exhibition on January 9. He further understood that the January 17 date was selected by Mr. Jobs and Ms. Nancy Heinen, the former General Counsel, and that the stock price on January 17 was higher than the price on January 2. * Finally, Mr. Anderson understood that the Board of Directors, which consisted of sophisticated corporate executives of national stature, including the former Chief Financial Officer of IBM, verified the January 17 date by signing in early February 2001 a Unanimous Written Consent (UWC) with an effective date of January 17. It now appears the Board may not have given the necessary prior approval to the grants, contrary to what Mr. Anderson understood from Mr. Jobs and from the Board's signing of the UWC with an effective date of January 17. "Mr. Anderson has agreed to pay disgorgement, the difference in the value of the stock between the January 17 date and the date in early February when the UWC was signed by the Board. "With respect to the October 2001 grant to Mr. Jobs that is also the subject of the complaint, Fred had virtually no involve
Misery loves company. Let's point to somebody else so they're not just pointing at me.
As background: I'm a forensic accountant, do large financial investigations of public companies, and am currently doing a stock option investigation. I do not have any inside knowledge of the issues at Apple.
In fact, it isn't at all possible that the SEC could require Jobs to resign from Apple.
Not true at all. The SEC has fairly broad powers to permanently ban a person from serving as director or officer of a public registrant.
Section 10(b) of the 1934 Act. See: http://www.nysscpa.org/cpajournal/2003/0303/featur es/f031803.htm
I'm free to take questions!
I think you'll find Jobs' Reality Distortion Field is just as effective on investigators and lawyers as it is on your average computer user.
Consultant? I recall he was brought in on that note - SEC bar that as well?
Yikes, and I was pretty sure, too. My apologies.
Please, for the love of God, no more car analogies.
Apple had been operating under the common interpretation of Statement of Financial Accounting Standards No. 123:
http://www.fasb.org/pdf/fas123.pdf Oct 1995, 134 pages
However, Apple and several thousand other companies were surprised to learn that their understanding of FASB 123 might be flawed, and so the Federal Accounting Standards Board issued a clarification in December 2004, the cleverly named Statement of Financial Accounting Standards No. 123 (revised 2004), more commonly known as FASB 123R.
http://www.fasb.org/pdf/fas123r.pdf Dec 2004, 286 pages
Now, it will be intuitively obvious to even the most casual observer that there are certain technical differences between these documents, extending beyond mere thickness and into the mystical realm of public accountancy. I won't belabor the obvious by going into details of the audits and revisions that resulted from this event.
In the worst case scenario for Jobs, he did not even do enough to get into the Republican party. Bill Gates will send Jobs a bottle of champagne with a note that reads "join the club."
Convicted? No, never convicted!
The other thing is that options backdating (giving you the right to buy/sell some stock at a better, earlier price for higher profit) is legal, but you have to properly report it - it counts as income, and the feds want to tax it.
DATABASE WOW WOW
They could just say "It's all Microsoft's" fault. Everyone else seems to be too lazy to come up with their own ideas as to what causes what, and MS seems to be the scapegoat for everything simply because they make a good product. Blow me if you disagree.
:(){
"Forensic accountant".
Why does that sound HOT? >.>
Suggest Apple without Jobs: The world panics. Suggest Microsoft without Gates: The world says "yeah, and what changes?" So, yeah, Jobs is cooler than Gates that way. But: which company will survive the loss of the Megalomanianical leader? Maybe Gates is cooler that way? He's dispensible (sorta....once you get rid of Ballmer....ass).
... and Leon is getting larger!
Hasn't the SEC already closed its investigation in to Jobs' involvement with these options? That's what I heard on business news weekly this morning, anyway...
Since Jobs never exercised the options, his only guilt in this scam is in having been awarded the options by his company (where the options backdating was approved by Anderson himself who's making the accusation now).
It's kind of like your friend giving you a forged check from a rich person's account, and then him getting busted for writing these forged checks. Since he's busted he wants to claim you as an accomplice, even though you never cashed that check.
Just kind of like the time my wife caught me leaving the house to go fuck her sister! I just went back in the house and everything was ok!
And hate to break to you, but the cops have this thing called "conspiracy to commit a crime". You would definitely be charged with a crime if you knowingly took a forged check from someone.
Hollow words will burn and hollow men will burn.
I recall the same. However, he was named the interim CEO in 1997, and the "interim" was dropped in 2000.
Currently, Jobs is the CEO and a (non-Chairman) Director of Apple, Inc.
The SEC has already closed the case. There will be no more action. The story is a whole lot of nothing.
Actually, this story is from yesterday so the link was relevant at the time.
A cat is fine, too.
Further from the Seattle PI:
Anderson's attorney said "Anderson was reassured by Jobs that the board of directors had given the necessary approvals, and that Anderson concluded that the grant was being properly handled." Well, apparently since the board meeting in question never occurred, Jobs lied to his CFO to cover up the backdating.
"Lack of technical competence coupled with the arrogance of power, as usual, leads to no good end."
The guy that the independent investigation said did it, who was forced to take some time with his family, kaff, kaff, who now has settled for millions to avoid a civil trial, wouldn't have any motivation to backstab his old boss, would he? If it's against Jobs, you apparently don't need any proof. Who's running Slashdot, Nancy friggin' Grace? Has anybody said, "evidence"? A denunciation timed to take attention from your own admission of misdeeds doesn't qualify as evidence, just an assertion. The only response would be, "Jobs denies the assertion." Are Slashdotters wishing for a Trial by Ordeal? "Here, Mr. Jobs, is a copy of Vista. You will use this as your sole OS for the next 30 days. If you don't poke your eyes out during that time, you are cleared of all charges because God has obviously given you the grace to overcome this ordeal."
BACKDATING STOCK OPTIONS IS NOT ILLEGAL. probably just did not inform the IRS properly (which is not as simple as it seems, even for a fortune 500 CEO).
So some time after I started work the secretary called me over and asked me to sign the last page of like 30 fresh off the printer, acknowledging my options. At the time I didn't sit down and read all those pages, and I don't even remember if I got a copy. First of all, what does it mean to sign the last page of a 30 page document? It seems absolutely meaningless. Second, when a company offers you options as part of a job offer, are they required to state what percentage of the company is being offered?
How do people know what stock options they are actually being granted?
You should have received a stock option grant certificate, which shows the number of options, the strike price, vesting terms, length of option, exercise terms, etc. The company won't tell you the actual percentage ownership, just the number of options/shares (numerator). You can figure out the total number of outstanding shares from the 10K, Bloomberg, Yahoo Finance (denominator).
An option is "in the money" if you can use the option to buy a share from the company at a price (the pre-determined strike or exercise price) that is less that what the share is currently trading for. If the trading price is less that your option stike price, then the option is 'underwater' and (generally) worthless.
You'd know if you had any significant percentage. More likely that you own 1,000 shares of a company with 200,000,000 outstanding.
Thanks for your reply. In my particular case, the options were for a private company, so there were no SEC filings to look up on a website. I imagine any investor for a private company would want the same information I'm looking for -- that is, just what are they getting for their investment? An investor certainly has more clout when it comes to getting these answers, but a potential employee should be able to get these same answers.
Last Thursday we did a coolhunt on the standing of Steve Jobs on slashdot. . What we found is that while it seems that most people still think he is cool, there seems to be serious doubt about how much he knew about the options backdating. True coolness also means honesty and transparency!