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SEC findings seen echoing those of Apple's internal probe


Given the broad scale of Apple Computer's independent probe into its stock options irregularities, any subsequent investigation by the Securities and Exchange Commission is likely to turn up consistent results, one Wall Street analyst says.

PiperJaffray analyst Gene Munster told clients on Friday that the findings of Apple's investigation — published prior to the open of the stock market — were reassuring in that they reiterated current management was not guilty of any misconduct.

The analyst had previously stated his belief that there was a less than 5 percent likelihood Apple chief executive Steve Jobs was involved in the falsification of options documents.

"We view [Apple's findings] as a positive given investor's concerns that this issue could lead to the removal of Steve Jobs," he wrote in a research note.

Munster, at the same time, implied that some investors may choose to act with caution ahead of any formal comments from the SEC on the matter. However, he added, "given the scope of Apple's exhaustive internal investigation, we believe that any SEC findings would be consistent with Apple's findings."

In its delayed 10K filing on Friday, Apple said its independent counsel and forensic accountants reviewed stock option grants made on 259 dates, in which they spent over 26,500 person-hours searching more than one million physical and electronic documents and interviewing more than 40 current and former directors, officers, employees, and advisors.

In all, Apple's investigation turned up irregularities regarding 6,428 grants on 42 dates. After forfeitures, it recorded a non-cash stock-based compensation expense of $84 million (after tax) to reflect the required restatement changes.

Munster called the financial impact of the restatement "immaterial," as it carries a mere 2 percent impact to the company's net income over the last nine years.