Current and former members of Apple, including CEO Steve Jobs and several directors, have been sued again over their role in the company's stock options-backdating affair.
The latest case, filed in federal court in San Jose last Friday, was put on record Monday. Martin Vogel and Kenneth Mahoney, the plaintiffs, are charging several executives and directors of Apple with securities fraud for failing to disclose the company's practice of backdating certain stock option grants in the early part of this decade.
Apple has admitted that the company backdated certain option grants, including two awarded to Jobs, in order to take advantage of more favorable exercise prices for those grants. This practice isn't illegal, so long as it's disclosed, but dozens of companies failed to do so in the early part of this decade, and some people have gone to jail for it.
Federal and state authorities have thus far declined to prosecute Jobs, or any current members of Apple, after an internal investigation cleared the CEO, but the Securities and Exchange Commission has filed a lawsuit against Nancy Heinen, Apple's former general counsel, for allegedly covering up the backdating.
This isn't the first shareholder suit to be filed; a similar suit has faced challenges getting off the ground because it's very difficult for shareholders to prove that they were harmed by this practice.
According to InformationWeek, Vogel and Mahoney claim that the disclosure chopped $7 billion worth of shareholder value from Apple's stock in the two weeks following the June 2006 disclosure that the company had discovered backdating in its past. Their problem, however, is that Apple's stock has basically tripled since then, as the company has continued to sell gobs of Macs, iPods, and, more recently, iPhones.