“Apple Inc. Chief Executive Officer Steve Jobs and other managers were accused in an investor lawsuit against the company of backdating stock-option awards to maximize their personal profit,” Joel Rosenblatt reports for Bloomberg.
“The complaint was filed in federal court in San Jose, California, by shareholder Martin Vogel, who had a similar case dismissed last year by U.S. District Judge Jeremy Fogel,” Rosenblatt reports. “Vogel and co-plaintiff Kenneth Mahoney said in the new complaint, again assigned to Fogel, that Apple executives hid the cost of the backdated options from shareholders, leading the company to file false financial statements. Vogel seeks class- action, or group, status to represent other investors affected by the backdating.”
“The claims mirror allegations made by the U.S. Securities and Exchange Commission in a lawsuit against former Apple General Counsel Nancy Heinen, who is also named as a defendant in the shareholder suit. The SEC case is scheduled for trial next year,” Rosenblatt reports.
“Apple, maker of the iPod and iPhone music-and-video players, said in 2006 that it backdated 6,428 stock-option grants issued from 1997 to 2002,” Rosenblatt reports. “The company conducted an internal investigation, finding no misconduct by Jobs, who recommended favorable dates on some option grants other than his own. The company recorded $84 million in charges to correct its accounting.”
Rosenblatt reports, “Stock options allow holders to buy shares later, usually at the trading price on the day the options were granted. Through backdating, companies retroactively change grant dates to those with lower stock prices, giving recipients built-in profits. Unless disclosed and recorded as expenses, the practice is illegal because it hides costs from shareholders and regulators.”
More in the full article here.
[Thanks to MacDailyNews Reader “DLMeyer” for the heads up.]
And in other news, President Kennedy might get shot and Dinosaurs have a chance of becoming extinct.
seriously, get over yourselves. You own stock that is worth so much more now than it did when you bought it.
Quit being a greedy fsck already.
Just give it up, Vogel!
so he is gonna sue for getting more money??? Does this make sense?
I expect very few comments about this due to ignorance of the subject.
Wait, nix that.
I expect a large number or comments about this despite ignorance of the subject.
I agree..
Why dont these people give up..
Its a black mark on the stock..
I got it at $10 so you know I am happy!!!!
Someone’s going to jail.
Can you say, “ambulance chaser”, boys and girls?
Hopefully this frigtard will join William Lerach and other scum like him in a federal pen. And soon.
…….only in America!
@Ignoramus:
OK, how about some basic tort law? You need three elements for a successful lawsuit:
1. Negligent or intentional misconduct on the part of the defendant.
2. Damages: Some kind of loss.
3. Proximate cause: The misconduct by the defendant must have caused the loss.
In this case, there is no loss. There is a substantial profit, and thus, no damages.
Secondly, backdating stock-option awards to maximize personal profit, while intentional is neither illegal nor negligent.
Thirdly, to the extent that the stock price may have been depressed the proximate cause of that depression was not the actions of the Apple executives, but rather the blanket “witch hunt” approach by the federal government and the resulting speculative reporting by entities like Forbes.
The result is that the plaintiffs have no case against anyone at Apple. They might have a case against the federal government (good luck with that) or entities like Forbes, but that would be stretching it.
@uh oh:
Ignorance alert!!!
You don’t go to jail as the result of a civil suit. As to the chances of this case succeeding, see my previous post. Apple might pay them some money to go away, though. That’s what they are counting on, it appears.
Just another bunch of corporate officers making some more bucks. Who the hell cares.
Now oil future’s trading…there’s some lawsuits I’d like to see happen.
My take was that this is going nowhere. Sure, it meets Zeke‘s first condition – but isn’t that a felony? The second condition? Not every Day Trader got burned by the misconduct. Not even every Day Trader dealing with AAPL got burned. And very few non-day-traders got burned in any way! Thus, it’s the gamblers who – maybe – took some losses. The third condition? Yeah, well, isn’t that a given? I mean, not in terms of a legal action, but at least some of the losses suffered by some of the gamblers can be traced back to the misconduct. As I recall, though, none of this was traced back to Steve Jobs himself and he in no way profited by it.
How many times are they going to try to shoot this dead horse?
Apple needs to fight just one of these bullshit cases all the way and bankrupt a couple of these ambulance chasers. It would send a lesson and really help in future negotiations on the inevitable lawsuits to follow.
Greedy people!
Martin Vogel, livin’ the American dream. Gawd bless you, Martin.
“As I recall, though, none of this was traced back to Steve Jobs himself and he in no way profited by it.”
Recall though that the standard of proof for a civil case is much less than for a criminal one. You just have to be more than 50% sure something happened, rather than the beyond reasonable doubt standard required to send someone to jail.
OJ was innocent of murder in a criminal case, but liable for damages a civil one. Essentially the second jury said that in their opinion he did it, but the only thing at risk was his bank account not his freedom.
The same is true here. Steve did wrong. Those that don’t believe Steve knew about the grant are fooling themselves. Many justify it because while Steve was lining his own pockets he also made them some money. But that doesn’t really matter.
“none of this was traced back to Steve Jobs himself and he in no way profited by it.”
That’s actually incorrect. Apple’s ex CFO has gone on the record saying Steve knew of the implications and the Apple board has said that Steve picked the favorable dates.
To believe that Steve did no wrong, you have to believe that a guy who gets 100% of his multi million dollar compensation from stock option grants doesn’t understand how they work.
The options Steve was granted did go underwater. But he traded them for preferred stock which he did profit from. So while he may not have profited from those exact options, by trading them for something of value he did profit from the transaction.
Nothing to be ashamed of then nothing to be afraid of. That is, if Steve Jobs et al are not guilty of any crimes or misdemeanors then they have nothing to fear.
So, why the anguish and nail biting, fanbois? Do you think Jobs is guilty?
Now I know why it is so difficult to name Job’s successor! There are few white collar criminals with the same hucksterism and technical ability as Jobs. The stupid ones are busted and in prison; and the smart ones are quietly profiting from their crimes and avoiding any scrutiny that would come from being identified as Apple’s future CEO.