Involves backdating Live nauty chat
Steve Jobs apologized last week while announcing the results of an internal investigation regarding Apple’s backdating of stock options, in which options were granted on a preferentially low stock price date instead of the date upon which the grant was decided.Jobs said that no current management was involved in backdating options, which occurred on 15 dates between 19.Dozens of firms were caught up in the revelation of this practice, which typically occurred in the late 1990s up to 2002, during the dot-com era when stock options went from a typically long-term proposition for gain to quick, meteoric run-ups.The Sarbanes-Oxley Act of 2002 changed the landscape because it requires stock options to be reported within two days of being issued.Companies issue options to employees and others to reward them if the company’s stock increases above the strike price of the option, or the price at which it was granted.
Any executive who did this - and we can expect a new wave of investigation announcements from companies in the coming weeks - is playing a far more dangerous game than in the old type of grant-date backdating.
Some have made a clean breast of their practices and issued reports; others have resisted and may face full-scale SEC lawsuits as a result. Unless further investigation should reveal more than this first report, however, Apple has limited the risk of further problems, and Steve Jobs will remain in his exalted role.
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Separately, Apple’s former chief financial officer, Fred Anderson, resigned from the Apple board, on which he had served after leaving his executive position in 2004.
While Apple stated that two unnamed former officers of the company were involved in backdating stock, it made no connection between Anderson resigning and that statement.