“A New York pension system will be the lead plaintiff in a shareholders lawsuit accusing Apple Inc. of securities violations over backdated stock options,” The Associated Press reports.
AP reports, “The New York City Employees Retirement System was named the primary plaintiff in the lawsuit Friday by U.S. District Judge Jeremy Fogel, according to Grant & Eisenhofer, the law firm representing the group.”
“The pension system, which manages about $89 billion in retirement assets for more than 200,000 municipal employees in New York City, holds about 1 million shares of Apple stock. The institutional investor and other shareholders are seeking class-action status for their case and want damages in connection with what they allege were illegally issued stock options,” AP reports.
“The lawsuit, filed Aug. 24, is now being heard by the same judge who is overseeing a separate but similar securities case that consolidates a number of civil complaints over Apple’s admitted mishandling of stock options accounting,” AP reports. “Apple has not yet legally responded to either case.”
Full article here.
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I guess the 1200% increase in the price of the stock over the last 5 years isn’t enough for these bastards.
Apple has something like 860 shares. If they have 1 million shares worth somewhere over 85million, their portion of the 85 million involved in the backdating issue is significant enough to go after. I just wonder if they asked nicely first.
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Sorry, 860 million shares…
Kill the Golden Goose so that Grant & Eisenhofer partners can all pad their kid’s college fund and buy that 3rd home in Boca Raton.
This lawsuit (and others sure to follow) should not be a surprise to anyone following the Apple stock options investigation.
Once a company admits wrongdoing, it will have to compensate shareholders in the inevitable class-action lawsuit.
An unfortunate side-effect is that many companies will not concede, in a formal and legal sense, to any wrongdoing, even when it is absolutely clear to any neutral observer that they have.
One might be inclined to give kudos to Apple that it has admitted wrongdoing and restated previous years’ financial results accordingly.
But in this case Apple admitted wrongdoing almost certainly because it wanted to head off a criminal investigation (that is still underway) by the SEC and the Justice Department.
As Gorden Gecko sez in “Wallstreet”:
Greed, for the lack of a better word, is good!
Come on ladies and gentlmen, lets get this damn business done, and get it done right the first time, levy fines and other sentences as mandated by the law, and let’s stop conveniently dragging this thing out in slow motion so people will start watching Apple stock fall and we’ll have to start listening to how Apple is going to go under at any moment.
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What the f*$! is all this about MDN??
The lawyers are not looking after the pensioner’s best interest. The lawsuit will do nothing but drive the stock down and make the lawyers richer. The retirees in the pension system should sue the lawyers and managers for not protecting the pensioner’s interests.
Settle in for a long ride on this. It’s a mess and it won’t go away without some resolution that includes a pound of flesh that will require a couple of size smaller Levis at the next Keynote.
Figures it would be an faceless institution named as lead plantiff. I suppose most individual investors are not too unhappy with Apple.
Peace.
$84 million dollar charge for back-dated stock options split between 860 million shares….
We got screwed out of $0.097 per share. Sue them for damages because that 9.7 cents that we all got screwed out of. Why waste your time?
*DISCLAIMER – Math might be slightly off or rounded
In another leak, Apple sues The New York City Employees Retirement System for publicizing about a frivolous lawsuit that lowered shareholder value by five times more than the actual settlement of their frivolous suit returned to investors.
I suppose that the New York pension system will now have to demonstrate the harm caused their pension fund by Apple’s stock options “irregularities”. That may be difficult, considering that Apple’s rise in stock prices have probably benefited the pension fund significantly. No harm, no foul, right? You can bet that whether or not the NY pension system gets awarded a settlement, the lawyers will get paid nonetheless. Hooray for the lawyers, they win even if they lose!
I bet lawyers love this stuff. I wonder how much the plaintiffs will get after the legal fees are factored in. The lawyers probably stand to benefit the most from cases like this.
The $84,000,000 accounting of NON-CASH adjustments to account for the back-dated stock options represents a mere 0.12% of Apple’s current Capitalization. Twelve one-hundreths of one percent…
Boy or these stockholders damaged.
The pension plan holds 1,000,000 Shares of Apple. Had they purchased them on the day Steve Jobs received his options at $18.30 per share till today, each share would be worth about $168 (not adjusted for splits). So the New York pension plan appreciated about $149,000,000 in increased value.
And here they are, suing because of a reduction of 0.065% of their gain… their share a mere $98,000 IN NON-CASH, non-realized accounting expenses, incurred to attract and keep talented people.
Let’s see… Steve Jobs has made their (assumed) investment of $18,300,000 worth $168,000,000, a whopping 918% more than it was worth, in just six years, and they are pissed over a possible reduction of a mere 0.065% of their gain? Ridiculous!
It has been recently calculated that if Steve Jobs were forced out of Apple, the stockholders $71 billion capitalization would be reduced by 28%… $20 Billion!
This Lead PLaintiff’s holdings would suddenly be worth 28% less… a loss to its members of about $47,300,000. Again, lets review… they are pissed about an unrealized paper accounting reduction of 0.065%, or $98,000 … and are willing to wipe out 50 TIMES that amount for their pensioners because they think they have been somehow cheated? Talk about cutting off one’s nose to spite his face.
Oops… make that “and are willing to wipe out 500 TIMES that amoung for the pensioners because they think they have been somehow cheated?”