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Even though the Apple board supports him, the SEC may take another look at Jobs' involvement with a stock options backdating scandal

Former Apple chief financial officer Fred Anderson's comments against CEO Steve Jobs may have given further life to the Securities and Exchange Commission's probe of Apple’s option backdating in 2001.  Anderson stated that he warned Jobs of the possible legalities of backdating Apple stock options, which may lead to federal investigators and the SEC to take a second look at the case.  

While Jobs will most likely still be clear of any charges, another SEC investigation will keep the attention on an issue that Apple quickly wants to move past.  The SEC has unofficially cleared Apple as a company, but declined to mention anything specifically about Jobs.

The Apple board officially said that it will continue to support Jobs throughout the scandal.  

"Steve Jobs co-operated fully with Apple's independent investigation and with the government's investigation of stock option grants at Apple," the board said in a statement.  "We have complete confidence in the conclusions of Apple's independent investigation, and in Steve's integrity and his ability to lead Apple."

Anderson and one other former Apple executive had legal action filed upon them earlier in the week.  Anderson has already filed settlement with the SEC, agreeing to turn over $3.5 million in fines.  In doing so, he neither admitted nor denied any wrongdoing in the 2001 options grant.

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Not a big deal...
By meewok on 4/26/2007 4:39:02 PM , Rating: 5
It's ok... I imagine an interview could go something like this.

Jedi Gore: This isn't the Jobs you're looking for. <wave hand>

SEC Troopers: This isn't the Jobs we're looking for... Move along, move along.

Seriously, this whole thing is little upsetting. Other C-levels have lost their jobs and their reputations based on these types of allegations. The fact that Jobs knew about the backdating and was ok with it and personally gained from it (did he?) makes me a little sick. I mean, there definitely seems like there's something wrong there. That money had to come from someone's bottom line and therefore, someone was cheated.

I also understand why Apple is standing by him. They need to. If he had to step down, I'm sure their stock/net worths would take quite a hit. It's worth any legal costs for them to fight to keep him in the clear.

Sorry, I'm just a conspiracy theorist wanna-be.




RE: Not a big deal...
By TomZ on 4/26/2007 4:57:17 PM , Rating: 2
I agree. The feeling I've had about this situation is that Jobs did something wrong, but the Board was trying to protect him. That's why I said in an earlier post that it seems like he is above the law.

Also, I never heard anything about Jobs paying back the value of the grant. But I suppose the pressure is not there to do that, and it would probably be a bad strategy since it would in effect be an admission of guilt.


RE: Not a big deal...
By Zandros on 4/26/2007 6:23:24 PM , Rating: 3
IIRC, Jobs returned the options to Apple Inc. without using them, so technically he didn't make any money off it.

But that isn't really the case here, I believe. Isn't this about who allowed the backdating the options without taking certain accounting issues into consideration, ie. taxes?


RE: Not a big deal...
By Terrin on 4/27/2007 9:39:38 AM , Rating: 2
You see what a little information does you? Jobs did not pay anything back because there was nothing to pay back. He didn't make any money on the options.

Second, Jobs is not an accountant or lawyer. Accordingly, he cannot be expected to know what accountants or lawyers are expected to know, namely complex laws. That is why CEOs are allowed to rely on lawyers and accountants to tell them what to do.

In this case, backdating, which I find despicable is still not illegal. Accordingly, even if Jobs picked the dates and made money by picking the dates, that wasn't illegal. The only thing that was illegal was Apple not accounting for options. It is an accountant's job to account for options.

Jobs had nothing to gain by lying. The Board loves Jobs. Accordingly, they would have given him his stock at any day he wanted. There is no need for him to lie about that.

Moreover, as much as the Board loves Jobs it doesn't have to try and protect him, it hired an independent law firm to find the truth. It found there was no evidence Jobs did anything wrong. The SEC looked at that evidence and agreed.

Moreover, Anderson's statements are not inconsistent with Apple's statements, and I doubt he hasn't already told the SEC this.


RE: Not a big deal...
By wildmannz on 4/26/2007 5:49:54 PM , Rating: 2
Unfortunately bloggers are not reporters - and opinion does not represent fact here.

Mr Anderson paid 3.5m worth of SHAREs back, in addition to a fine ($150k). So this inaccuracy taints the rest of this article.

As for what the SEC is doing - that is pure speculation on Michael Hoffmans part. So - the title is incorrect straight off-the-bat. Interesting opinion - and I'd love to see it backed up by SOME facts.

I don't know about you - but paying a fine and repaying a large sum worht of shares IS admitting wrongdoing. Whether you say it outright or not.


RE: Not a big deal...
By TomZ on 4/26/2007 6:12:57 PM , Rating: 3
Yes, and if was wrong for Anderson, then it should be wrong for Jobs too, right?


RE: Not a big deal...
By rsmech on 4/26/2007 9:25:52 PM , Rating: 2
I agree, the only problem I have run across in business is proving that guilt. There is a fine line between illegal & unethical in business, to me there isn't. Either you screwed someone or you didn't. If you did it was wrong. Wrong should equal guilt


RE: Not a big deal...
By lemonadesoda on 4/28/2007 10:05:15 AM , Rating: 2
While your sentiment is laudable, in practice, it doesnt work. You cannot hold private business accountable to such methods while at the same time excluding governments from it. And govts (whether yours or other countries) are constantly screwing someone somewhere and USUALLY it's the taxpayer to the benefit of the civil servants.


RE: Not a big deal...
By Christopher1 on 4/29/2007 5:07:28 AM , Rating: 2
Ah, that's the rub... governments are NEVER or very rarely taken to task when they try to screw someone because they are the 'almighty government!' But have a person like Steve Jobs or someone even lower down do something wrong..... people are calling for their heads.

My own cousin recently had something happen like this. She qualifies for housing assistance since she has a newborn baby, and the government is trying to screw her for not getting the papers she needed when the civil servant DIDN'T WANT TO GIVE THEM TO HER WHEN SHE ASKED FOR THEM! She said "Come back later when you can pick up the forms for both you AND your boyfriend and fill them out at the same time!"

She did, now they are trying to say that she defrauded the government, though another bigger problem is that they have her listed as starting work a month and a half before she actually did!


RE: Not a big deal...
By melgross on 4/27/2007 12:59:48 AM , Rating: 2
It would be wrong for Jobs—if he did anything wrong.

There is much speculation over this but no facts to show that he did.

Anderson's lawyer is trying to make sure that Anderson's companies won't kick him out. He wants to have him look clean.

All we know is that Anderson supposedly said to Jobs that everything had to be done properly, and that jobs told him that it was. A top SEC official said that it was Andersons's job to make sure that it was, and he didn't.

That's not much.

If Jobs asked Heinen, who was responsible for the board minutes, as both General Counsel and Board secretary, and she replied that it was fine, then he is off the hook. It wasn't his job to dig further unless he suspected something.


RE: Not a big deal...
By Terrin on 4/27/2007 9:45:47 AM , Rating: 2
Wrong. Anderson is the CFO. That F stands for financial. That means it was his responsibility to make sure Apple's financial accounting was in order.

Jobs just wanted his options on the date most valuable to him. That isn't illegal. It was Anderson's job to make sure everyone received their options in a legal manner.


RE: Not a big deal...
By Christopher1 on 4/29/2007 5:08:48 AM , Rating: 2
Exactly right. Anderson only had to tell the board and shareholders that the stock was backdated. That's all he needed to do!

Why didn't he do it? Because he knew that the shareholders would HOWL about it.


RE: Not a big deal...
By wildmannz on 4/29/2007 9:12:30 AM , Rating: 2
The options backdating is not good for the company. The SEC are not prosecuting Jobs. They WERE prosecuting Anderson. There is a difference there - and reasons for both.


"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997

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