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Thursday, June 29, 2006, 04:00 pm
Apple probe finds stock option grant irregularities
Apple Computer said on Thursday that an internal investigation has discovered irregularities related to the issuance of certain stock option grants made between 1997 and 2001.One of the grants in question was to chief executive Steve Jobs, but it was subsequently cancelled and resulted in no financial gain to the CEO, the company said.
A special committee of Apple's outside directors has hired independent counsel to perform an investigation and the company has informed the Securities and Exchange Commission.
"Apple is a quality company, and we are proactively and transparently disclosing what we have discovered to the SEC," said Jobs. "We are focused on resolving these issues as quickly as possible."
Apple executives have been instructed to offer no further comments on the matter until the independent investigation is concluded.
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Previous Comments View All
Was this topic necessary?
Yes, dummy, because SEC investigations are serious, and the financial impact of governmental fines would affect the company.
Because it regards AAPL.
Was this topic necessary?
Yes, because Apple is a quality company.
This news caused AAPL to drop between $1-2 during after market trading. See AAPL Summary Quote at Nasdaq.
Was this topic necessary?
Anything that doesn't praise the all-mighty Apple is not necessary, right?
Anything that doesn't praise the all-mighty Apple is not necessary, right? [/B]
In the view of our friendly neighbor Ireland, topics are obviously only relevant if they praise Apple, or if they criticize that Apple's main market happens not to be Ireland.
http://biz.yahoo.com/ap/060629/apple...ions.html?.v=3
"The troublesome stock options included a batch that went to Apple co-founder Steve Jobs, but the chief executive canceled those awards in March 2003 before he cashed them in to realize a gain. Jobs surrendered all of his outstanding options in exchange for 5 million shares of Apple stock now worth $295 million."
Thius could be the end of Steve Jobs.
Yes, because Apple is a quality company.
More from the article...
The stock option news, released after the market closed, appeared to jar investors. Apple shares surged $2.95, or 5.3 percent, to close at $58.97 on the Nasdaq Stock Market, then retreated by $1.42 in extended trading.
Most of the stock option investigations so far have revolved around a practice known as "backdating."
This occurs when a handful insiders retroactively decide to set a stock option's exercise price at an ebb in a company's stock price instead of pegging the exercise price to the prevailing market value at the time of the award.
Stock options become more valuable as the market price rises above the exercise price, so backdating fattens the recipient's profit.
Backdating stock options isn't necessarily illegal, but it can cause a company to improperly deduct employee compensation expenses -- a misstep that could exaggerate profits and result in an underpayment of taxes.
If the backdating isn't properly disclosed, regulators also might interpret the action as a form of financial fraud, exposing companies to civil penalties and a raft of shareholder lawsuits.
Apple didn't say whether its stock option trouble involved backdating.
Meanwhile, two other Silicon Valley companies disclosed widening investigations into their previously disclosed backdating issues. Both Mountain View, Calif.-based Intuit Inc. and Foster City, Calif.-based Equinix Inc. said they had received Justice Department subpoenas seeking more information about their past stock options.
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