Apple settles option backdating class action suit with New York City pension fund

“Apple Inc. has agreed to pay $16.5 million to settle a class action suit by the New York City Employees’ Retirement System that the company improperly backdated stock options between 2001 and 2006, the city said in a statement,” Karen Freifeld reports for Bloomberg.

“Apple will return $14 million to shareholders and contribute a total of $2.5 million to corporate governance programs at various U.S. universities, including Harvard, Yale and Columbia, the city Comptroller’s office and Law Department said in a statement,” Freifeld reports. “Administrative and attorneys’ fees of $4 million will be paid separately by Apple, the statement said, bringing the total value of the settlement over $20 million.”

Freifeld reports, “Steve Dowling, a spokesman for Apple, said in a telephone interview that Apple and the city’s pension system ‘agreed to resolve their dispute in order to avoid lengthy and costly litigation.’ He said the company was ‘glad to put this matter behind us.'”

Full article here.

[Thanks to MacDailyNews Reader “Lynn W.” for the heads up.]

18 Comments

  1. Can somebody explain exactly how the back dating affected the pension fund? I am confused about the connection between doing something naughty and affecting the holdings the pension fund might have had. What is the cause and affect connection? Thanks.

  2. Can somebody explain exactly how the back dating affected the pension fund? I am confused about the connection between doing something naughty and affecting the holdings the pension fund might have had. What is the cause and affect connection? Thanks.

  3. The rules are fairly simple … you have to report anything you do that might devalue the stock. Even if the apparent value of the stock continues to rise, it can be fairly assumed that it would have risen further/faster if you had NOT done … whatever. We could be talking about introducing a new model of Dell, but handing out fistfuls of stock options is the more usual scenario. Y’see, you have to be able to a) prove that it was a known consequence and b) evaluate the “damage” done. I can be hard to prove that the introduction of a new model will cause a loss – at least, if you are the sort of person who would have bought Dell stock in the first place.

  4. The rules are fairly simple … you have to report anything you do that might devalue the stock. Even if the apparent value of the stock continues to rise, it can be fairly assumed that it would have risen further/faster if you had NOT done … whatever. We could be talking about introducing a new model of Dell, but handing out fistfuls of stock options is the more usual scenario. Y’see, you have to be able to a) prove that it was a known consequence and b) evaluate the “damage” done. I can be hard to prove that the introduction of a new model will cause a loss – at least, if you are the sort of person who would have bought Dell stock in the first place.

  5. Back dating is such a lame thing in my opinion.

    But this city pension crap fund should be happy they are even holding Apple sharea… if Voz and Steve never created Apple this crappy pension fund would just… Well there would be NO pension to talk about. They should be happy and NOT DARE to sue Apple again.

  6. Back dating is such a lame thing in my opinion.

    But this city pension crap fund should be happy they are even holding Apple sharea… if Voz and Steve never created Apple this crappy pension fund would just… Well there would be NO pension to talk about. They should be happy and NOT DARE to sue Apple again.

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