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."

Comments

More Likely than Resignation

[Stanistani]

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.

Re:More Likely than Resignation

[wattersa]

1. That is why you have a lawyer make those statements. Your lawyer is not under oath. Your lawyer only has an ethical duty not to mislead a court or a jury. That doesn't apply to the opposing side-- much less the public. See Cal. Rules of Professional Conduct 5-200. The idea is, you have someone other than the principal make statements so that the principal always has an excuse (i.e., that the representative made an error in transcription, etc.). Blame any "mistake" on the lawyer-- that's what is at work here.

2. A lawyer's prepared statement is designed to give wiggle room while implying certain things that put the client in a favorable light or make the client appear innocent. See my breakdown of the statement:
- Fred didn't play a "day to day" role
-> could mean
- Fred wasn't in charge of that, so he's not responsible for misconduct.
- Fred was in charge of that, but he wasn't involved in the details, so someone else committed misconduct and he's not responsible for it.
- Fred was in charge and is officially responsible for the misconduct, but he didn't know about it because he can't review _everything_ that happens or else he couldn't do his main job-- helping the company make money for shareholders.
-> implies
- Fred is innocent.
- Fred is above the fray.
- Fred is too important to have committed misconduct.
- Fred couldn't have known about misconduct because he doesn't know all the details.
- Whoever committed misconduct hid it from Fred.

- "in the granting, reporting, and accounting of stock options."
-> could mean
- Fred doesn't have the authority to grant stock options (true: the Board of Directors may be the only entity that can grant stock options).
- Fred isn't involved in reporting stock options to the SEC or shareholders.
- Fred isn't involved in auditing/accounting.
- Fred has authority to grant stock options but it's not one of his more significant duties.
- Fred is involved in reporting to the SEC, but since reports to the SEC don't come out on a day to day basis, the statement is true.
- Fred is involved in accounting of stock options, but since auditing and accounting isn't done on a day to day basis, the statement is true.
-> implies
- Fred is not responsible for misconduct.
- Fred is above the fray.
- Fred can manage a public company's finances in the future because he did nothing wrong here.
- Fred knows nothing.

- "he was not involved in any knowing manipulation of the process"
-> could mean
- Fred manipulated the process unknowingly.
- Fred was involved in manipulating the process but didn't know the extent of his role.
-> implies
- Fred didn't

Probably a standard, overblown scare

[SashaM]

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.

Re:Probably a standard, overblown scare

[maeka]

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.

That stock price chart merely reflects that the market hates uncertainty, the announcement of anticipated news always brings an up tick, as uncertainty is removed.

The uncertainty, in this case, was on possible "smoking guns" revealed as part of Fred Anderson's settlement. There were none, his "punishment" was minimal, and as soon as the market processed this information the temporary downturn (during the period of imperfect information when traders are unsure if they have the full story) reversed and Apple's stock went higher than opening.

And then he'll be right back

[MikeRT]

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?