SEC to Explore Allegations of Jobs Involvement in Backdating Scandal
April 26, 2007 2:59 PM
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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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RE: Not a big deal...
4/26/2007 4:57:17 PM
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...
4/26/2007 6:23:24 PM
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...
4/27/2007 9:39:38 AM
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.
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