December 27, 2006 1:57 PM PST
Report: Apple executives faked stock option documents
- Related Stories
Apple board member resigns in options probeOctober 4, 2006
FAQ: Behind the stock options uproarJuly 26, 2006
Apple, CA wrestle with stock option irregularitiesJune 29, 2006
Apple's head lawyer steps downMay 8, 2006
Shares of Apple stock were down $3.55, or 4.36 percent, to $77.96 in early morning trading on the Nasdaq stock market following the report on Law.com. Apple is one of many companies--including CNET Networks, publisher of CNET News.com--embroiled in government investigations into the practice of stock option backdating, in which companies would assign favorable grant dates to stock options in order to ensure hefty profits for executives.
However, Apple investors appeared to be more at ease by the end of the day, or more enterprising traders sensed a buying opportunity. By the end of the day Apple's shares had recovered to trade at $81.52, a penny over yesterday's closing price.
The report said falsified documents were unearthed by Apple's internal probe into the matter. Earlier this year, Apple said it had identified concerns with two former executives as a result of its investigation into its accounting for stock options, and the report names former chief financial officer Fred Anderson and departed general counsel Nancy Heinen as the subject of the probe, although it's unclear whether they are the ones thought to have falsified the documents.
Apple is providing all relevant information to the SEC for its investigation, a company representative said, declining to comment further.
Apple has said CEO Steve Jobs did not profit from the stock option backdating, although he was aware that favorable grant dates had been assigned to certain executives. As a result of the ongoing investigation, the company has delayed filing its annual report with the SEC since it will probably have to restate earnings for prior periods to properly account for the options. Apple is expected to release the report this week, and that report could shed more light on the documents in question as well as Jobs' role in the scandal.
The report said that Jobs has hired his own attorney to handle the government investigations. Piper Jaffray analyst Gene Munster issued a report Wednesday stating that he believes Jobs was not personally involved in compensation issues and therefore is unlikely to get dragged into the mess. Also, he noted that Apple has said its investigation has focused on former employees, not current members of the company.
1 commentJoin the conversation! Add your comment