Apple today announced 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 CEO Steve Jobs, but it was subsequently cancelled and resulted in no financial gain to the CEO. A special committee of Apple’s outside directors has hired independent counsel to perform an investigation and the company has informed the SEC. Apple executives will refrain from commenting further on this matter until the independent investigation is concluded.
“Apple is a quality company, and we are proactively and transparently disclosing what we have discovered to the SEC,” said Apple CEO Steve Jobs in the press release. “We are focused on resolving these issues as quickly as possible.”
Press release here.
MacDailyNews Take: Uh, Wall Street really doesn’t like the term “irregularities” very much at all. “Proactively and transparently disclosing” will hopefully help matters for Apple.
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WTF?!!!!
I’m with aapl dude. I don’t know what any of these acronyms mean, or what this article is talking about.
I changed my mind. There aren’t really any acronyms in this article. But I am still clueless as to what it is talking about.
Face,
Basically, they have found that something has happened, like giving options RIGHT before a new product was announced, or giving people that didn’t actually work for the company employee options. Things like that are a HUGE no-no for a publically traded company. Hence, the SEC (Securities and Exchange Comission) has gotten involved. That is definitely NOT a good thing. The SEC has the power to help a company out, or bring it down. Hopefully they kept very, very good records on their actions.
Oops, I meant publicly not publically… sorry!
MW process: as in “My brain did not process that spelling correctly”
Summary,
It didn’t say the SEC was involved. Apple pro-actively contacted them to let them know of Apple’s internal findings.
This may be the explanation for some of the departures in the last 6 months – as long as the Company is proactive in the investigation and it doesn’t touch Jobs (as appears to be the case) this has no impact on the stock – buy on the aftermarket weakness.
Summary – at least you didn’t say pubicly!
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Not much of a suprise here, really.
The Securities Exchange Commission currently has a bug up their a** about stock options policies, and has investigations under way at at least 50 companies right now. I would say that the boards of every company granting options has “internal investigations” going right now, because they don’t want to be accused of covering anything up.
BTW, this is an issue over a Microsoft as well.
http://news.zdnet.com/2100-3513_22-6084617.html
Cowboy,
I wouldn’t say that this would have NO effect on stock. Investers are very shaky on this type of news and since Sarvane-Oxley reporting (Thanks, Enron!) guidelines have gone into effect, I think this will shake AAPL in the short term. It’s not going to tank, but it will be pretty volatile for the next couple of days, with a bearish tendency. Overall, it won’t be a big deal.
Karl, I will agree, I guess the SEC isn’t involved yet, but trust me, once you “tell” them something… they’re involved whether you want them to be or not. At least Apple knows what could happen if they kept this quiet. While biting the bullet can really, really hurt up front, it is better that this is out in the open.
“This may be the explanation for some of the departures in the last 6 months “
Yet again another conspiracy theory about Apple. I wish people would put their government under such scrutiny. Perhaps then we’d get some real accountability.
Amen, macromancer, amen.
Summary – everyone wondered about why the General Counsel, and others, left without explanation – if she was part of any impropriety relating to options and was dismissed as a consequence there is little for the SEC to do. As long as Apple has cleaned its own house the SEC wont bother with them – they have too many other companies to investigate. That is why I think that this will have little impact (and creates an opportunity to buy any shares being dumped) even in the short term.
Apple $3 up during the day, then $1.75 down after this news.
Pity the fools who bought in at $70-80, thinking it would go to $90-100!
I just need AAPL to get down to about 54-55 so that I can load up again.
irregularities=sell.
This is announced now to help the longterm.
No doubt some eager SEC attorney is looking to polish his resume by sending Steve Jobs to prison, like they did to Martha Stewart.
Prison– not gonna’ happen if the deal was cancelled. This is a vestige of past economic policies and the workarounds companies tried to avoid taxation, etc, I’d bet. If it was really cancelled, they have little to worry about.
But for the stock… well…
Now Steve, I told you to burn the evidence instead of using a shredder.
Amateurs.
This is all fairly hilarious, seeing as though sjobs himself missed out on tremendous fortunes by turning a large amount of options in for a smaller amount at the reduced price.
He, along with all of us, could not foresee the iPod phenomenon — he would’ve held all the shares for the unbelievable growth.
Oh that’s why they added the “Secure Empty Trash” feature….
And BTW, it was Apple telling the SEC that they might have a problem NOT the SEC telling Apple.
It’s what I expect from Apple. Good show Steve.
Metamucil.
“It’s what I expect from Apple. Good show Steve.”
Do you mean the theiving, or the bit where knowing they would soon be busted so they confessed?
“little for the SEC to do. As long as Apple has cleaned its own house the SEC wont bother with them “
Yep, sure, keep thinking that.