US Attorney investigating Apple stock options

The U.S. Attorney's office in San Francisco is investigating stock options backdating activities of Apple

The U.S. Attorney's Office for the Northern District of California is investigating the stock options backdating activities of computer and consumer electronics manufacturer Apple.

The federal action comes in the wake of the disclosure by Apple last month that it completed an internal investigation of options backdating and concluded that, although Apple chief executive officer Steve Jobs recommended some backdating of stock options for himself and other Apple employees, he wasn't aware of the accounting implications of those recommendations.

Luke Macaulay, a spokesman for the U.S. Attorney's Office in San Francisco, confirmed the existence of the investigation, but did not provide additional details.

In a Dec. 29, 2006, filing with the U.S. Securities & Exchange Commission (SEC), Apple disclosed that an October 2001 board meeting at which 7.5 million options for Jobs were granted never actually took place and that the options weren't officially granted until December of that year. Backdating the options grant date to October, though, gave Jobs and instant profit of about $26 million because Apple stock was selling for less in October than it was in December.

Also in the filing, the Cupertino, California, company said it would take an $107 million after-tax charge against earnings to correct stock options accounting errors in prior years. It acknowledged backdating about 6,400 stock option grants between 1997 and 2002.

"The board of directors is confident that the company has corrected the problems that led to the restatement, and it has complete confidence in Steve Jobs and the senior management team," said Al Gore, the former U.S. vice president and the Apple director who chaired the special internal investigative committee.

Backdating stock options isn't necessarily illegal, but the practice must be disclosed and properly accounted for or it would violate federal regulations.

Join the newsletter!

Or

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.

Robert Mullins

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?