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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What next ?
4/27/2007 8:07:05 AM
Some interesting options below-
The agency said it would not pursue enforcement action against Apple, but said that decision does not bar further civil claims against other Apple executives.
If Jobs is not named in an SEC lawsuit, he probably will also avoid criminal prosecution, said defense attorney and former federal prosecutor Scott Christie.
"It would be odd for the SEC to decline an investigation for lack of evidence and the U.S. Attorney to then pursue a case criminally ... they would feed each other," Christie, a lawyer at McCarter & English, said in an interview.
Christie said that prosecutors generally start low in the corporate hierarchy and work up to the ultimate target of the investigation by obtaining cooperation through plea deals.
"It remains to be seen whether that is the strategy and how effective it will be," he said.
Prosecutors will have to move quickly if they want to pursue fraud charges related to the 2001 options grants because a five-year statute of limitations on such cases could expire soon, said Jeffrey Rosen, a former SEC attorney and now a defense lawyer with Cozen O'Connor in Washington, D.C.
"If anything is going to happen criminally it should happen pretty soon," Rosen said.
"We can't expect users to use common sense. That would eliminate the need for all sorts of legislation, committees, oversight and lawyers." -- Christopher Jennings
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