“Now that an internal investigation over Apple Computer Inc.’s stock-option practices has helped abate investor worries over Steve Jobs’ role as CEO, a key lingering concern will be the effect of pending earnings restatements,” May Wong reports for The Associated Press.
Wong reports, “Apple said Wednesday its three-month investigation did not uncover any misconduct of any current employees but did raise “serious concerns” over the accounting actions of two unnamed former officers.”
“Apple said it will likely have to restate some earnings due to revised tax and stock option-related charges. Auditors are still reviewing the situation, and Apple said it has not yet determined the extent of the financial effect,” Wong reports.
“The looming restatements could dramatically reduce some of the windfall generated during the company’s recent run of record profit, analysts said,” Wong reports. “Apple has reported profit totaling $3.1 billion during the past four years. If the restatements are severe, it could dent Apple’s stock, IDC analyst Richard Shim said.”
Full article here.
MacDailyNews Note: And, if the restatements are minor, it probably won’t dent Apple’s stock.
Wong also reports for AP ina related article, “Ignorance can be bliss, but it’s not a tight defense, lawyers say. When Apple Computer Inc. disclosed Wednesday its internal investigation had uncovered some stock-option backdating, the company said CEO Steve Jobs was aware of the practice but unaware of its accounting implications. The probe also did not find any misconduct by Jobs or other current officers, the company said.”
“‘Ignorance is usually not a good defense,’ said Jeffrey Siegel, a veteran securities lawyer and partner at Blank Rome LLC in New York.’Executives are expected to understand the laws applicable to their companies and the rules of their required disclosures,'” Wong reports. “The practice of backdating occurs when a stock option’s exercise price is set at a point lower than the prevailing market price, which can inflate the recipient’s award. The manipulation itself isn’t necessarily illegal, but securities laws require companies to properly disclose the practice in its accounting and settle any charges that may result.”
Full article here.
MacDailyNews Note: Apple will announce Q4 earnings on October 18th.
Related articles:
Former CFO Anderson helped turn Apple Computer around – October 05, 2006
Wall Street unshaken by results of Apple stock options investigation – October 05, 2006
Is Apple rotten at the core? – October 05, 2006
Analyst: Anderson, Heinen may be former Apple executives responsible for irregular options grants – October 05, 2006
Analyst: Apple restatement due to options irregularities not expected to be significant – October 04, 2006
Apple’s special committee reports findings of stock option investigation – October 04, 2006
Shareholders allege Apple execs reaped ‘millions’ in unlawful profits – August 23, 2006
How options-backdating irregularities can affect your Apple Computer stock – August 23, 2006
Apple’s options imbroglio: Mac-maker granted options at or near key events in company’s history – August 18, 2006
Apple added to Nasdaq’s list of ‘delinquent companies’ – August 18, 2006
Apple unlikely to be delisted by NASDAQ – August 16, 2006
Apple CEO Steve Jobs drawn into stock options scandal – August 15, 2006
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
Fred D. Anderson joins Apple Board – June 08, 2004
Apple CFO Anderson to retire on June 1, 2004; will join Apple’s Board of Directors – February 05, 2004