Wednesday, December 27, 2006, 10:00 am
Apple shares fall 5 percent on latest options scareShares of iPod maker Apple Computer fell more than 5 percent Wednesday morning following a report that federal prosecutors are examining potentially falsified stock-option documents to determine whether to file criminal charges.
Apple shares sunk as low $76.77, down from Tuesday's closing price of $81.51, after a report by The Recorder published on Law.com cited "individuals familiar with the case" as saying the U.S. attorney's office has shown "great interest" in the Cupertino, Calif.-based company's stock-options dealings.
The report, covered by AppleInsider on Tuesday evening, alleged that company officials forged administration documents to maximize the profitability of stock-option grants to its executives.
Apple in an October statement said its investigation into the matter "raised serious concerns regarding the actions of two former officers in connection with the accounting, recording and reporting of stock option grants."
The Recorder cited people familiar with the matter in disclosing that those two ex-officers are Nancy Heinen and Fred Anderson, the company's former general counsel and chief financial officer, respectively.
But weighing most heavily on Apple shares are concerns over chief executive Steve Jobs, who, according to the publication, has hired outside counsel separate from Apple's lawyers to deal with the SEC and Justice Department.
Until recently, Jobs had been represented by the the company's outside law firm, O'Melveny & Myers. Apple had previously stated that its own internal probe into the matter turned up no misconduct by Jobs or other current company officials.
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