“It is the scandal Wall Street can no longer dismiss as ‘a few bad apples.’ In what amounts to systematic corruption, dozens of American companies stand accused of manipulating share options to inflate executive pay artificially, and then lying to shareholders about it,” Stephen Foley reports for The Independent.
Foley reports, “As many as 2,000 companies may be involved. So far, 85 have publicly admitted they are under investigation. Directors from nine companies have quit in disgrace. Six executives from two firms are facing criminal charges. Angry shareholders are lining up their lawsuits.”
“And now we have the extraordinary possibility that shares in Apple Computer might be thrown off Nasdaq, and that Steve Jobs, the iPod maker’s visionary leader, could be questioned by the Securities and Exchange Commission, the Wall Street regulator,” Foley reports.
Foley reports, “…Last Friday, Apple said it might be forced to delist from Nasdaq. It missed the deadline for filing its latest quarterly results, which will have to include significant changes to the old figures and possible reductions to future earnings guidance. The company has a period of grace but will have to meet Nasdaq within the next couple of months.”
Foley reports, “Mr Jobs received an option to purchase 10 million shares, dated on the stock’s lowest point in January 2000. News of the investigation into that and other executive grants sent Apple shares lower as investors feared the legendary chief executive, who founded the company 30 years ago, might be forced to quit, although there has been no indication of wrongdoing on his part. He faces questions, too, over another of his companies, Pixar, the film animation studio he sold to Disney last year. Two senior Pixar executives received options grants at low points for the share price.”
“New companies are admitting they have been drawn into the regulatory investigation at a rate of almost one a day but the scandal has taken a long time to unfold,” Foley reports.
Full article here.
Related articles:
Apple announces update regarding stock option grants – August 11, 2006
As expected, Apple delays quarterly results due to stock-options grants review – August 11, 2006
Some stock options grant decisions were made by Apple board, and potentially, CEO Steve Jobs – August 10, 2006
Disney: no material impact from Pixar options – August 09, 2006
Pixar options draw scrutiny – August 08, 2006
Apple stock options scandal? What scandal? – August 07, 2006
Class action lawsuit over stock options filed against Apple Computer, Inc. – August 04, 2006
Wall Street forgiving of Apple’s stock option irregularities; CEO Jobs unlikely to be terminated – August 04, 2006
Apple’s stock option irregularities escalate into a scandal as world awaits Steve Jobs’ WWDC keynote – August 04, 2006
Apple warns of profit restatement dating back to 2002 – August 04, 2006
Apple loses 3.5% to $67.15 in premarket trading – August 04, 2006
Apple announces update regarding stock option grants – August 03, 2006
Shareholder’s options suit against Apple alleges ‘striking pattern that could not have been chance’ – July 11, 2006
Apple announces update regarding stock option grants – July 05, 2006
UBS: stock options probe unlikely to hurt Apple – June 30, 2006
Apple joins growing list of companies entangled in stock option ‘irregularities’ – June 29, 2006
Apple to investigate stock option grant ‘irregularities’ made between 1997 and 2001 – June 29, 2006
This is worrysome.
I keep telling myself it’s an honest mistake, but…. honestly, I don’t know.
Tough days ahead Stevo!
People with that much money… don’t make honest mistakes with that much money.
Does anyone know how long this investigation will take?
AAPL is going up. Looks like the market doesn’t care.
The Independent is a tabloit, discredited rag in the UK.
This has all been already announced, studied, commented on. Of course there will be no dilisting, no criminal charges, no implication of Jobs, etc.
Apple will restate, take a small revenue hit, pay an SEC fine, and move on.
Poof, it never happened.
Of course it’s not an honest mistake. Somebody’s writing different dates on the forms. It’s common practice, though. Not typically investigated, but this is an SEC crackdown.
MAYBE Jobs could say he didn’t think it was serious, but he can’t say he didn’t know it was illegal, or wrong.
Percy, I agree, but there are two things which make me believe it was an honest mistake.
1. The options were cancelled before anyone profited from them.
2. The irregularities were discovered and brought to the SEC’s attention by Apple.
Backdating options is perfectly legal.
You have to do it in the open, and also have to pay the employer taxes on the extra compensation gain the employee gets.
Apple probably did not do it in the open, but no criminal intent here.
I see a fine coming, and the sun will rise in the east.
Sell your Apple shares.
I actually would have recommended a buy but after thinking about it deep, irealize. deflation means less revenues for ANY company especially tech companies such as Apple.
on top of that, when Apple hit $50’s recently, it actually would have gone under it, if it wasnt for barrons and few other companies that started releasing positive news as soon as Apple was about to fall below $50.
‘zactly… this is why wall street could give a hoot.
I hope Steve can stay out of jail or at least run Apple from inside.
oops, meant to ref ‘v’s comment, not limes… seems to be some inner conflict going on with that recommendation
Nothing to see here folks, it is a turd newspaper recycling old news. No dark clouds on the horizon. Has been dismissed already.
And AAPL is climbing as it is expected.
Next FUD, please.
I don’t think I’ve ever seen a positive article about Apple in the Independent. Someone has an agenda over there.
Jeff,
yes, that surprised me a bit.
But when you consider that this is one of many cases and they’ll all get very good lawyers, then it could take the best part of a year before there are any real consequences.
That might be the reason why investors aren’t geting too ruffled.
Insider scam going on at Apple.
They knew what they were doing – wouldn´t you like to buy some Apple stock and be able to pick the lowest price for the stock in the last 5 years as the price you will pay?
Another case of media drumming up readership because people get their panties in a bunch worrying about what-ifs.
Not even speculation can provide any insights here– it eaither happened illegally, or it didn’t. Wait and see.
Any good tech news?
Mr Jobs is human and dishonest like the rest of them! Perhaps he should quit and join Mr Gates and his foundation to make amends.
Isn’t this a 4 year old story? Wasn’t this resolved then. Like everybody did this even Coca Cola (at least that is how the Market Place story I heard 4 years ago went)? Doesn’t everybody comply now?
I actually believe there is something going on, the perception that “Apple is a clean company, nothing will probably be found ” is just wishful thinking.
just think about how steve jobs shows so much interest in talking about “market share” and so on whenever there are announcements.. he is clearly interested in making the stock go up higher and higher. obviously he is loving the benefits.
limes, please do not speak of which you know nothing about.
Limes, er, uh, STOCK BOY . . . is that you? Come on, man, be honest enough to use your “real” name, OK?
DELL’s a tankin’, MSFT’s a rottin’, and all you can do is tell everyone to SELL, SELL, SELL their Apple stock.
Oh, “SELL, SELL, SELL” . . . that’s another of your nom-de-nets, isn’t it?
Wake up, man, and get on board! The train’s leavin’ the station and APPL is up $1.40 today!
Are you still short at $47? Gawd but you’re pathetic.
The Independent is passed over paper with zero influence on anyone bar a few of yesterdays press reporters.
Apple has a great future, with Steve Jobs at the helm for the next 20 years. This is a “so-what” issue that is only of interest to hacks who identify more with failure than success.
OF COURSE Jobs spends time worrying about market share and increasing the value of Apple–that’s his JOB!!!
Wow, are you an 8-year-old?
Jake