Apple has given warning that it could be removed from the highly regarded Nasdaq Global Select Market, as the maker of iPod and Macintosh acknowledged for the first time that it was the subject of a federal investigation into its stock option practices. The company, which last June revealed ‘irregularities’ in its stock option grants and took an USD 84 million (GPB 43 million) charge six months later, said that the investigation by the US Securities and Exchange Commission could lead to further restatements and delays to its financial reporting.
Apple in Continuing Difficulty Over Options Issue
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2007-02-03 6:05 pmWintermute
Hey, it’s Apple, so they can do no evil, right?
I think some rational thought and skepticism when discussing Apple would really help.
Now I am not saying that delisting Apple from NASDAQ select is the right or wrong thing to do, but I don’t see why investigator’s should somehow be less harsh to Apple just because they are Apple. If they did do something wrong (and their actions where wrong – however we do not know the extent of their wrong doings), then they should be punished to the full extent of the law.
I mean why should they be on the select list? They where involved in shady practices, so it’s only fair to delist the of the select list since Apple demonstrated that their behavior does not live up to the level of confidence required to be on the select list.
Next we will be hearing Apple fans proclaim that the investigators should let Apple off because DOJ didn’t do anything to MS.
Edited 2007-02-03 18:07
Before you take those nails and crucify Jobs and Apple there are, according to eWeek, at least 159 other companies under the same type of investigations.
“Apple, maker of the market-leading iPod digital player and Macintosh computers, is among the best known of more than 160 companies under scrutiny for their accounting of stock options granted to executives.”
The U.S. Securities and Exchange Commission and the U.S. Attorney’s Office for the Northern District of California are `staying the course` and now looking for those pesky corporate `terrorists` with their stock option `bombs`.
Seriously Apple said they would take the financial hit or penalty and the lawyers are in line to get their share of a profitable teet.
Edited 2007-02-03 21:36
2007-02-03 10:55 pmgpierce
“Seriously Apple said they would take the financial hit or penalty and the lawyers are in line to get their share of a profitable teet.”
Apple’s shareholders, the legal owners of the company, take the “hit”. The hit, the crime, is that of theft which is what this scandal amounts to. That other executives have profited exactly the same way does not excuse the practice. The managers (which is all these executives are) have decided to reward themselves for their success by taking shares for less than they are worth (by backdating them) and selling them at their current higher value. So how does this hurt the Apple shareholder? Two ways–the stock that is issued is not bought from the existing pool, but rather is added to the existing pool thereby diluting the value of each share; second, the stock, the owner’s property, is then sold to the manager at a discount to allow the manager to profit even further at the expense of the owner.
The sums that are being discussed amount to many millions of dollars. This is grand larceny, no petty crime. Many pople have spent in time for far less. If the judicial system worked with fairness Jobs and many others would be spending months in jail.
2007-02-03 11:18 pmaGNUstic
“If the judicial system worked with fairness Jobs and many others would be spending months in jail.”
So would we all for one thing or another.
2007-02-04 4:14 pmDuffman
So how does this hurt the Apple shareholder?
Yeah, but without those ‘evil’ managers, Apple today would be almost dead and its shareholders bankrupt…
2007-02-04 6:01 pmOliver
Without the financial help of Microsoft in the 90s Apple would be indeed bankrupt
>At the 1997 Macworld Expo, Steve Jobs announced that Apple would be entering into partnership with Microsoft. Included in this was a five-year commitment from Microsoft to release Microsoft Office for Macintosh as well a US$150 million investment in Apple.
If we want to move forward and see Apple healthy and prospering again, we have to let go of a few things here. We have to let go of this notion that for Apple to win, Microsoft has to lose. We have to embrace a notion that for Apple to win, Apple needs to do a really good job. And if others are going to help us that’s great, because we need all the help we can get, and if we screw up and don’t do a good job, it’s not somebody else’s fault, it’s our fault. So I think that is a very important perspective. If we want Microsoft Office on the Mac, we should treat the company that puts it out with a little bit of gratitude; we like their software.
So, the era of setting this thing up as a competition between Apple and Microsoft is over as far as I’m concerned. This is about getting Apple healthy, this is about Apple being able to make incredibly great contributions to the industry and to get healthy and prosper again.
So bow to Microsoft
2007-02-04 12:00 amThom Holwerda
Before you take those nails and crucify Jobs and Apple there are, according to eWeek, at least 159 other companies under the same type of investigations.
Before you take those nails and crucify [insert_murderer] there are, according to [insert_source], at least [thousands and thousands of other murderers] under the same type of investigations.
No offense, but this is what we call a nonsense argument.
2007-02-04 6:12 amaGNUstic
“No offense, but this is what we call a nonsense argument.”
With all respect to you Thom. There are 159 other institutions or companies being investigated. The source, in this case, is eWeek.
It is neither a wrong assumption or a wrong inference on my part of established facts from eWeek.
Facts include several branches of the US government going after companies which may or may not have done wrong.
There may be an issue of legal clarity or interpretation of the laws that guide finance. Our laws, such as they are here, are very draconian. IANAL nor do I ever intend to be one. Back to the topic.
One of my degrees is in Sociology. I’ve learned that human beings as-well-as organizational entities are not perfect by any measure in the US, Europa or other nations. This is true from the chief executive of a company to the janitor. Mistakes are generally in the form of communication.
Organizational communication is generally disfunctional at best. I’m sure Willy G. and Paul A. have disfunctional communications as well.
The argument here is wheather Steve J. or someone within Apple is guilty of a crime. Maybe they are.
Unless you are George B. and his hunting partner Dick C. the last time I checked the person who is accused of a crime is presumed innocent until facts can be presented which indicate they indeed are.
To prove Steve J. is a criminal then both Mens Rea ( Guilty Mind ) and Actus Reas ( Guilty Act ) must be proven.
These two concepts of law in common law-based criminal law jurisdictions such as England, Canada, Australia, Scotland, New Zealand and the United States. Some crimes in the US also require a proof of an attendant circumstance.
In other words, before you place Steve J. in `chop chop` square in business Makka for a perceived violation of some ancient writing in a legal book you must prove Steve J. had a specific intent to violate an actually `known legal duty`.
Maybe our laws are `nonsense` where you reside, and maybe some of them are silly, there is no perfect human society anywhere on this planet. These laws a person a chance to prove their innocence before we as a society lop off their heads, shoot them with AK-47s, or … nail them to the crosses we make for them.
Edited 2007-02-04 06:22
2007-02-04 10:47 amalcibiades
No, this is false. There are not 159 other companies being investigated on charges of having awarded options grants to the CEO at Board Meetings which never took place.
Or, if there are, why not list some?
This, not the backdating, is the really serious charge, because it suggests, if proven, a horrendous deficiency in financial controls.
And should it turn out to be true, and to have been solely the work of a junior in-house lawyer, well, that would be even more indicative of lack of financial control, wouldn’t it?
2007-02-04 2:10 pmaGNUstic
Okay. There are no investigations going forward at this time even though a simple Google search reveals there are.
It is alleged that it was actually two former accountants who skewered the books and not a junior lawyer. The practices of the former accountants were found after an internal audit. This says management suspected something.
What’s my logic?
I remember several years ago at our bank someone there deposited someone elses check into our account. We were baffled at first. Once we discovered it was not ours we took action to correct it and the money was returned to its owner.
Mistakes, both deliberate as-well-as accidental, occur. This is true for individuals as it is for companies.
Do I think, yes, I do, the bank manager heself or the bank chain CEO is reponsible for the mistake? The answer is no. Our account has been spot on for well over twelve years now.
Do I believe Steve J. ordered two accountants to cook the books while he ran the company? I sincerely doubt it. Who knows! I know our federal government is still looking for weapons of mass destruction in Iraq so other fictions can be just as entertaining.
2007-02-04 3:02 pmThom Holwerda
I was not saying Steve Jobs or Apple is guilty. I was trying to say that the fact that there are 159 companies under investigation does not lessen IN ANY WAY the fact that such an investigation is currently taking place on Apple.
You are trying to make the possible crime seem less serious by pointing fingers at others and saying “everybody does it”. THAT is ALWAYS a nonsense argument.
2007-02-04 6:55 pmalcibiades
This is not quite right either. In particular, the part about the two former accountants is not quite right. Have a careful look at CAL LAW.
Quote: “People like Wendy Howell, the former in-house Apple lawyer responsible for option paperwork, probably won’t be attending Jobs’ eagerly awaited MacWorld speech Tuesday. Late last year, she became the lone person to lose her job as a result of the company’s well-publicized options problems.
“Howell’s name hasn’t been publicly mentioned in the Apple options mess, and her firing wasn’t disclosed by the company in its series of public disclosures of options problems.
“But she was the person who filled out the paperwork on a 2001 option award to Jobs that has grown infamous since just after Christmas, when Apple acknowledged that the value of the grant was artificially pumped up via a set of fabricated meeting minutes.”
It is correct that eweek says that there are 160 companies under investigation for improperly accounting for options.
In how many other cases is it alleged that Board minutes were fabricated?
2007-02-04 7:02 pmWintermute
aGNUstic, I don’t usually revert to name calling. But you are a moron, there is no other way to describe your behavior.
It’s kind of sad really how far Apple fans are willing to go to keep themselves deluded. I wish more people would look at things in an objective manner without any of this rabid fanboy bullshit.
Your attempts to downplay Apple’s behavior is beyond pathetic. I don’t understand how the fact that 159 (links plz) other companies are under a similar investigation in any way makes Apple look any better. If anything it underlines, the fact that Apple is not really a very unique company. Their just as bad as the rest, except that their scam investors via their marketing to convince sheep like you that they can do no evil.
“So would we all for one thing or another.”
Forget the law, we all know that the law is full of shit. You can be a war criminal like Kissinger and roam around freely, but you got to jail for smoking a plant. The law isn’t what we are talking about. If Jobs was involved in this scam, then effectively he was involved in stealing millions in share value from Apple’s investors. I don’t care what you think of the law, that’s now right. If some black kid gets put in jail for a $100 robbery (never mind that with segregation he has very little chances to achieve anything in his life), then Jobs should definitely go to jail for involvement in a multi-million dollar scam.
Your attempts to blame everything on communication problems and ‘two former accountants’ are pretty lame. Your degree is sociology didn’t teach you anything about accounting. You cannot just make a typo and not have an impact on other anything else.
Your dedication to Apple is beyond any degree of normality. Find something noble to fight far, not a f–king corporation. There are more important things than protecting Jobs and Apple.
P.S. Stop using rhetoric, this is not a digg circle-jerk. Using sentences such as “Before you take those nails and crucify Jobs and Apple there are” or criticizing lawyers and the legal system does not add value to your argument.
2007-02-04 7:24 pmaGNUstic
If I am just being called a moron I am doing well. Thank you. I accept the title. If I am lame. So be it. I could be worse.
Until then I’ll keep typing.
2007-02-04 7:31 pmWintermute
The irony of your response…
2007-02-04 7:46 pmaGNUstic
I am capable of accepting the hit of someone who attacks without retaliation. Names and labels are useless.
That does not mean I will stop typing because you’ve said I should.
I’ve just grow weary of McSoft jihadists who want the install William as their global software Khalif.
2007-02-04 10:42 pmWintermute
I never said, you should stop typing. I said you should stop worshiping Jobs/Apple. Stop using rhetoric and not ignore arguments against you. So far you haven’t said anything that would give validity to your argument.
You can’t argue for shit. The only way you can argue your point is by brining in irrelevant topics such your crucification crap and “lawyers and the legal system are bad, so let poor Jobs alone!”
For you information, I dislike MS. I use XP, but not because I want to. I don’t like Gates for his business practices, but I have to say I respect his charity work. Your jihad crap is more useless rhetoric. I am done with you.
The judicial system hasn’t been about fairness for a long time now.
(Even though we like to hold on to that ideal.)
Simple fact that whether right or wrong there are different penalties between white collar theft and blue collar theft.
And we all know money transends everything: crimes, politics, you name it.
Edited 2007-02-04 00:00
… that there aren’t any Mac zealots around, proclaming that Apple invented the option predating and all other Companys just copy them.
Now that `Wintermute` is done I can move forward.
To me OS X is another *nix. As a *nix-like OS it will continue to improve. Since Steve J. has done an excellent job of moving Apple forward I sincerely doubt the shareholders will punish him too severely.
The US government may take more out of him and 159 other companies on their `list`.
Edited 2007-02-05 03:25
I think Apple is really trying to work with the SEC on this to get it straightened out. It would be a shame for NASDAQ to punish any company (not just Apple) that is really trying to fix itself.