“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.
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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
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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
i dont care if Apple’s stock is up 10% today, evantually it’ll go to $30. because deflation means lower prices, and lower prices means lower earnings.
Limes (Stock Boy/SellSellSell), of what deflation do you speak, O wise one? Or is this just another fart from the Upanishad’s ass.
By the way, I must agree with you on AAPL’s stock being $30 per share in the very near future, but not for the reason (???) you cite.
When APPL reaches $90 per share, the board will do a 3 for 1 split, and VOILA! $30 per share, just as you predicted.
HARD, COLD FACT: AAPL has split 2 for 1 three times since I purchased my original 1400 shares (now 5,600), so I can’t wait to have 16,800 in my portfolio!
How ’bout you, limes (no capital letter for YOU): Putting you money where your cavernous mouth is? Shorting AAPL to $30 now? I dare you!
No MDN take? Not so full of yourself today are you!
Nasdaq. Big deal. Who cares.
APPL will go up and up and up until bad news comes. Then everyone will cash out and the stock will drop like a rock. Trust me. Investors are pushing it up until the bad news comes when people are going to sell anyway.
Nope, I am not limes. Check the logs I have been disagreeing with him before. I always thougth limes was Gregg Thurmann who predicted Apple at $81 on July 21 and $91 by October.
But to add my 2 cents: It is not good what is going on here. And Apple is a high profile company and the feds will want to make an example here. So far all the cases that have been settled with similar things several people went to jail and almost all CEOs resigned. Its a different color, but very similar to insider trading.
Remember Martha Stewart went to jail for a year for selling about $100,00 in stock too early. At Apple we are talking hundreds and hundreds of millions of dollars.
But with Apple, Steve´s health situation is even worse than this. I can see the possible scenerio where to avoid resigning because of this stock scandel he resigns for health reasons.
Not good. There is nothing positive about these developments.
Ah yes, good ole American business ethics. Every CEO should have to sit and watch the movie “Wall Street” before being accepted.
The Independent is tabloid in size (as is The Times these days), but broadsheet in attitude. It’s a superb newspaper, but ever since Charles Arthur stopped writing for them (and going back further, Douglas Adams, of course), the tech section has been poor at best. But it’s poor all round, not simply biased against Apple.
Isn’t it only the WSJ because of Mossberg that is actually +ive about Apple ? Certainly the Grauniad is not.
But this is Business news, and as such, it’s pretty hard to put a +ive spin on these kind of irregularities. The upside for Jobs is that I bet not a single shareholder would want him to quit. God knows what happens to Apple if he is forced out.
Okay, right now, investors are assuming that because everyone has a negative view of the wallstreet due to recent declines… that stocks must be a “bargain deal” that is whats keeping dow above $11000.
in my opinion most stocks are overvalued by at least 50%. if it wasnt for barrons , WHOLE FOODS’ stock would have gone under $40 within 2 weeks.
if it wasnt for barrons, (newspaper) Apple’s stock would have fallen under $50 and triggered even a more massive sell off by the generic population. ( more people probably set the “sell if it goes below $50 than anyone else )
in other words whats keeping the stocks up right now is just promises by people in charge of rating and suggesting stocks, nothing is naturally flowing.
right now most of the stocks are so expensive because there is a general sense that once the summer is over, stocks will rise again. this view is not only shared by smart investors, the entire population of the earth believes that, which means they are all in stocks right now, so if they are in right now then who is going to buy once the summer is over?? aliens? creatures from pluto? how exactly will stocks get additional boost?? from where??
Whatever.
If Martha Stuart and go to jail and then come back untarnished then anybody can do it.
Executive Jail/prison means nothing anymore- there is almost a status to it. The government will give everyone their day in the slammer if we let them. It’s their way of “solving” the problem. Taking your toys away for a while.
Apple will still be Apple, Steve Jobs will still have great ideas. Business will go on as usual.
I get sucked-in every time by the headlines on this supposed scandal, stupid me. I read the articles and there is nothing new or the headlines are really off. What a crock of sh-t this whole thing is. These stories are getting as shoddy as the TV news.
Limes, you’re an idiot. How much money have you made in the stock market in the last 20 years, or even the last 3 years? I’ve made 300% over the last 20 years. I’ve gotten 1000% return on AAPL in the last 3 years. Look at the statistics for AAPL every Fall for the last 3 years and then try to tell me it’s not going to go up. There’s something called “back to school” and “Christmas” that happens every year in the Fall. AAPL’s fundamentals are excellent. It’ll survive this “scandal” and keep on making money.
Still waiting on a list of people who have actually lost money long term investing in Apple Stock…
Uh-Huh
Just what I thought.
“Remember Martha Stewart went to jail for a year for selling about $100,00 in stock too early. At Apple we are talking hundreds and hundreds of millions of dollars.”
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yes, but in Apple’s case, the options were cancelled before anyone profited from them. BIG difference.
AAPL long term performance.
August 15, 2003 AAPL = $10
August 15, 2004 AAPL = $17
August 15, 2005 AAPL = $45
August 15, 2006 AAPL = $66
All prices are split adjusted and rounded to nearest dollar.
As you can see AAPL is a long term hold. It’s a tech stock, so prices will fluctuate from day to day depending on news, but Apple over the last five years has shown tremendous growth and is still showing no signs of slowing down. AAPL is the kind of stock you want to hold for the long term.
“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.”
Um duh, congratulations you’ve just discovered the real reason companies exist. Send me your address I’ll mail you a cookie.
“As many as 2,000 companies may be involved.”
Wow. Either that is some serious systematic dishonesty, or there was something about the law that was unclear.
I suppose which one you think it is says a lot about your view of human nature.
I am a big supporter of the free market, but that does not mean that I side with corporations, consumers or stockholders. All have rights. These shenanigans are outrageous and should be punished.
Now how is back dating Options any different from “15% Below Fair Market value”?
I love the idea of Jobs running Apple from inside prison, like a Mafia boss. He would rock at this! He would also quickly come to control the prison, probably.
I’m pretty sure his recent gauntness is sheer, roiling stress, because he wouldn’t have canceled the options originally without mens rea. He did something wrong originally, probably almost casually, even if he was smart enough not to make any money from it after he had thought it through. But I’m sure plenty of other important people did make money from it.
I just hope the SEC isn’t going after him because he’s a Democrat.
Huck, according to Apple’s public statement. No one made money from the options. They were ALL cancelled before anyone could profit from it.
Secondly, this was discovered and announced publically by Apple.
“They were ALL cancelled before anyone could profit from it.”
A robber breaks into a building then realizes he is going to get caught so he cancels his plan to rob the building.
He still committed a crime.
“Secondly, this was discovered and announced publically by Apple.”
A robber breaks into a building sees the building is surrounded by police, then calls the police to turn himself in. A crime was still committed.
It is harder to grasp this crime because it is white color crime involving paperwork and securities rules. But it is still a crime. If it wasn´t people would not be going to jail for doing similar things that Apple is accused of doing.
This may be incorrect, but I worked at the apple store and was on the stock plan. Basically, in January and July your shares that you purchased through payroll became actual shares in a trading account. You got the best price…if the stock went down, you got the current price, if it went up you got the lower price. This was fixed on a specific date each time. So I don’t know if this comes into play with “choosing whatever date they want”, with Apple it seems to be specific dates. The employee stock purchase was almost like options, right?
“Irregularities” is just a polite way of saying “lies and deceit”. Too bad Apple’s stature in ethics isn’t as notable as its preeminence in digital innovation. Tsk, tsk, my darling is just another corporate tramp in heavy makeup. Apple gets a spanking and SEC didn’t even have to buy them dinner and a movie.
If no one made any money from The Irregularities, it’s hard to see why Apple would have to restate its earnings going back years.
But I’ll take your word for it, Trevor, since I haven’t been following the case and it sounds as if you’ve got your facts at hand.