Investors file new suit against Apple execs, directorsShareholders of Apple Computer have filed a new derivative suit against company executives and directors, marking the third such suit since Apple in late June said it had discovered several irregularities related to stock option grants.
The latest suit, filed in the United States District Court for the Northern District of California, arrives just as the Mac and iPod maker announced it has uncovered more irregularities than it had previously suspected.
In the complaint, shareholders allege that the defendants breached their fiduciary duties and colluded with one another to: improperly backdate grants of Apple stock options, improperly record and account for the backdated stock options in violation of GAAP, and improperly take tax deductions based on the backdated stock options in violation of the Tax Code.
The complaint also charges the defendants with producing and disseminating to shareholders false financial statements and other SEC filings that improperly recorded and accounted for the backdated option grants thereby concealing the improper backdating of stock options.
In a statement in late June, Apple announced an internal probe related to the issuance of certain stock option grants made between 1997 and 2001. On Friday, the company issued an updated statement, saying it had discovered additional evidence of irregularities and would likely need to restate its historical financial statements.
Keller Rohrback L.L.P, a firm representing Apple shareholders in the latest suit, said it is also investigating similar allegations related to the granting of stock options at over five dozen other companies, including: Activision, Applied Micro Circuits Corp, Barnes & Noble, Bed Bath & Beyond, Broadcom, Cheesecake Factory, Computer Associates, Home Depot, Intuit, Juniper Networks, Marvell Technology, Rambus, and VeriSign.
Apple executives and directors have been the target of two previous lawsuits also filed by investors due to the company's shady option grant filings.