Apple clears Jobs in options probe, restates earnings

Apple investigators found irregularities in the way stock was granted at the company but say CEO Steve Jobs did no wrong

An investigation into past stock option grants at Apple Computer has found that Chief Executive Steve Jobs was aware of procedural irregularities but did not benefit personally from the grants or understand the accounting implications.

Apple revealed the results of the investigation in documents filed with the U.S. Securities and Exchange Commission (SEC) on Friday.

The company also said it was restating its financial results with a total impact of US$84 million (AUD$106 million), including US$21 million combined for the years 2004, 2005 and 2006 as a result of the options probe.

The investigators found that Apple made a number of stock grants where the grant dates were intentionally selected to obtain favorable exercise prices. They reported serious concerns over the way that two former officers, whom Apple did not name, accounted for stock option grants.

Jobs appeared to have been exonerated by the investigation, however. "The board of directors ... has complete confidence in Steve Jobs and the senior management team," Apple said in its statement.

Apple announced in June that an internal review had discovered irregularities in the way it granted stock from 1997 to 2001, including a grant to Jobs. It formed a special committee of outside directors who hired investigators to research the company's option granting practices.

From 2003 to 2005, Apple implemented new procedures aimed at complying with the U.S. Sarbanes-Oxley Act, and the investigation didn't find any stock option grants after January 2003 that would require accounting adjustments. Still, Apple plans to adopt additional measures recommended by the special committee to improve its process of granting stock, it said.

Apple warned that the investigation and related legal and other services could weigh down its business in the future. It also warned that the situation has exposed the company to litigation risks, including one lawsuit filed in August. That case, in the U.S. District Court for the Northern District of California, alleges improper backdating of stock option grants.

The SEC has been investigating the practice of stock options backdating this year, and a number of tech companies have said they may need to restate earnings because of the practice. In August, three former executives of software vendor Comverse Technology were charged with conspiracy to commit securities fraud, mail fraud and wire fraud in connection with alleged backdating.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Nancy Gohring

IDG News Service
Show Comments





Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers


This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang


It really doesn’t get more “gaming laptop” than this.

Jack Jeffries


As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr


The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?