Apple stock option backdating scandal

Posted by / 08-Apr-2020 08:09

"This is venial." Apple disclosed that it had uncovered problems with its options grants in late June and said it would "proactively and transparently" disclose its findings to the SEC.

At that time, Apple said one of the problematic grants was made to Jobs but was canceled without any financial gain to the CEO and co-founder.

More than 100 companies are undergoing internal investigations or having their records reviewed by the Securities and Exchange Commission or the Justice Department to determine whether they manipulated stock-option grant dates to fatten their executives' potential payouts.

Options give holders the right to buy company stock at a set price, usually the price on the date the grant was made.

The investigation found that the company had handed out dubious stock-option grants 15 times between 19, covering all the major grants the company awarded during that time.

"That was everybody's fear," said Gene Munster, an analyst with Piper Jaffray.

"The bottom line is (Jobs) is not going to lose his job. It's a big sigh of relief for investors." Wall Street had little reaction to the announcement, which came after the close of regular trading.

Apple also said Wednesday it plans to turn over the results of its investigation to the SEC and reiterated that it expects to restate its financial statements to account for the stock-option expenses.

"Fifteen instances suggest an intentional pattern," said Greg Taxin, CEO of Glass Lewis & Co., an investment advisory research firm.

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has managed to get its mitts on the Apple CEO's deposition with the US Securities and Exchange Commission conducted in the wake of Apple's backdating scandal.

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