Apple chief executive questioned by U.S. authorities
Apple chief executive Steve Jobs was questioned by federal investigators last week regarding the company's stock options backdating, according several published reports.
Citing people familiar with the matter, both the San Francisco Chronicle and Bloomberg said Tuesday that Jobs was questioned by staffers from the Justice Department and the Securities and Exchange Commission.
Jobs arrived at the San Francisco federal building last week for the interview "flanked by lawyers," the Chronicle reported. However, those privy to the talks declined to reveal the specifics of what Jobs was asked or said.
Of particular importance to authorities is a grant for 7.5 million options issued to Jobs back in 2001 that was backdated by two months. In December Apple conceded that documents purporting to show a full board meeting had taken place to approve the remuneration, as prescribed by company guidelines, were later falsified.
In its report Tuesday, the Chronicle cited a person familiar with matter as saying Apple attorney Wendy Howell, whom the company dismissed in December, created the false documents at the instruction of Apple management.
Also at issue for authorities are over 6,400 additional company stock option grants which were similarly misdated. Apple said last month it would take an $84 million charge for bulk of the fortuitously granted options, but maintained that its own internal investigation into the matter turned up no wrongdoing by Jobs or any other member of its current management team.
Apple did say, however, that its investigation raised serious concerns regarding the actions of two former officers in connection with the accounting, recording and reporting of stock option grants. According to the Chronicle, Apple zeroed the probe on its own legal department. Nancy Heinen, the company's former general counsel, left Apple in May.
In a bizarre twist to the ongoing federal probe, the Chronicle also reported that Chris Steskal, the lead federal prosecutor in the government's probe into Apple, will leave the U.S. attorney's office in San Francisco next month to head up the white-collar practice with Fenwick & West. Apple is a client of Fenwick, and Heinen's husband, Dennis DeBroeck, is a partner there, the paper said.
The meeting between Jobs and federal investigators was first reported by The Recorder, a San Francisco legal newspaper.
Citing people familiar with the matter, both the San Francisco Chronicle and Bloomberg said Tuesday that Jobs was questioned by staffers from the Justice Department and the Securities and Exchange Commission.
Jobs arrived at the San Francisco federal building last week for the interview "flanked by lawyers," the Chronicle reported. However, those privy to the talks declined to reveal the specifics of what Jobs was asked or said.
Of particular importance to authorities is a grant for 7.5 million options issued to Jobs back in 2001 that was backdated by two months. In December Apple conceded that documents purporting to show a full board meeting had taken place to approve the remuneration, as prescribed by company guidelines, were later falsified.
In its report Tuesday, the Chronicle cited a person familiar with matter as saying Apple attorney Wendy Howell, whom the company dismissed in December, created the false documents at the instruction of Apple management.
Also at issue for authorities are over 6,400 additional company stock option grants which were similarly misdated. Apple said last month it would take an $84 million charge for bulk of the fortuitously granted options, but maintained that its own internal investigation into the matter turned up no wrongdoing by Jobs or any other member of its current management team.
Apple did say, however, that its investigation raised serious concerns regarding the actions of two former officers in connection with the accounting, recording and reporting of stock option grants. According to the Chronicle, Apple zeroed the probe on its own legal department. Nancy Heinen, the company's former general counsel, left Apple in May.
In a bizarre twist to the ongoing federal probe, the Chronicle also reported that Chris Steskal, the lead federal prosecutor in the government's probe into Apple, will leave the U.S. attorney's office in San Francisco next month to head up the white-collar practice with Fenwick & West. Apple is a client of Fenwick, and Heinen's husband, Dennis DeBroeck, is a partner there, the paper said.
The meeting between Jobs and federal investigators was first reported by The Recorder, a San Francisco legal newspaper.
Comments
Steve Jobs was questioned by federal investigators last week
At long last. You can't falsify company records and say that you have done nothing wrong.
Steve Jobs is not above the law.
At long last. You can't falsify company records and say that you have done nothing wrong.
Steve Jobs is not above the law.
the question is though - did Steve falsify the records?
At long last. You can't falsify company records and say that you have done nothing wrong.
You have some information that the SEC doesn't have? Wow, please share it.
the question is though - did Steve falsify the records?
Yes exactly maybe he took the grant however it wasn't known to him that they were backdated....many questions..
Yes exactly maybe he took the grant however it wasn't known to him that they were backdated....many questions..
Knowingly backdating options is not illegal. Not reporting it properly is. There are many people responsible for doing the reporting, some of which are no longer at Apple. The person who gets the options grant is not really the person responsible for reporting it, which is why Steve is going to be fine.
Its like if your tax accountant officially prepares your taxes and says, "If you list more deductions, you can get more money back" and you say, "ok", but it turns out he does some other illegal stuff like not reporting income, etc. He goes to jail, not you.
If he works at Apple by year's end I'll be really surprised. I don't think his job will survive this.
You like surprises?
My view: Around 15% - 20%.
(Although, the announcemnt effect -- adjusted for market movements -- to Jobs' health-related scare from a couple of year ago suggests a more modest 3% - 4%. (i) This assumes financial markets are reasonably efficient; and (ii) This proportion has probably gone up quite a bit in the past couple of years.)
Or maybe Jobs just really messed up.
What are the options here? Does this whole thing imply he may go to jail or just be forced to quit Apple again?
I hope neither, unless he's been actively training a replacement.
See... This is what's really happening. Microsoft is starting to see Apple as a threat. Microsoft, next to the oil, pharmacy and auto companies, has the most powerful lobbyists at the capitol. I'm sure there was some whispering about certain microsoft-threatening computer companies that should be investigated.
Or maybe Jobs just really messed up.
Actually Microsoft supposedly only contributes something like $1000 to both parties every year.. but they are obviously very "conservative republican" as somehow the DOJ goes to sleep anytime a (R) is in office. I would'nt be surprised if you're spot on though.
Knowingly backdating options is not illegal. Not reporting it properly is. There are many people responsible for doing the reporting, some of which are no longer at Apple. The person who gets the options grant is not really the person responsible for reporting it, which is why Steve is going to be fine.
Its like if your tax accountant officially prepares your taxes and says, "If you list more deductions, you can get more money back" and you say, "ok", but it turns out he does some other illegal stuff like not reporting income, etc. He goes to jail, not you.
This is the interesting point. I truly think there was an operational issue other than a conspiracy to commit fraud. The company has always impressed me in the way they manage the books (even in this situation). In the past they have never hesitated to take a charge as far as I can tell.
A serious question: What proportion of Apple's value -- over some reasonable time horizon, and not as seen in intra-day changes -- is attributable to Steve Jobs?
My view: Around 15% - 20%.
(Although, the announcemnt effect -- adjusted for market movements -- to Jobs' health-related scare from a couple of year ago suggests a more modest 3% - 4%. (i) This assumes financial markets are reasonably efficient; and (ii) This proportion has probably gone up quite a bit in the past couple of years.)
Hi yeah I was playing around with the charts and stuff, and I looked at things a bit closer, if you look at the spikes and then the "healthy corrections" afterwards, going back 4 years, AAPL is showing some sort of moving average which is "linear" rather than exponential. Which is kinda good which means the market is being somewhat sensible about AAPL. While going 4 years back in terms of revenues and sales, Apple Inc. is showing exponential growth of revenues and profits.
My take: AAPL is on course, without getting overheated, barring anything like Steve Jobs being locked up in Fresno State Prison (there's one in Fresno, right?) or something like that, there should be a gradual linear growth of AAPL... I might do a projection graph and post it here... Linear AAPL growth to end of 2007 and end of 2008..........
the question is though - did Steve falsify the records?
The Internal investigation led by Apple headed by Al Gore himself, delivered two scapegoats - the former employees. "Apple did say, however, that its investigation raised serious concerns regarding the actions of two former officers in connection with the accounting, recording and reporting of stock option grants. According to the Chronicle, Apple zeroed the probe on its own legal department. Nancy Heinen, the company's former general counsel, left Apple in May."
So one scapegoat has been trotted out in public, this Nancy Heinen. Another remains AFAIK not named.
Al Gore et al. have essentially cleared all of Apple's current management and (conveniently, if you're a conspiracy buff) laid the blame on two employees that have left Apple.
There's a low probability that *any* of Apple's current management will be affected, and instead these "two former Apple employees" identified by Apple's internal Al Gore-led probe will be brought to light and face possible Federal prosecution... IMHO
...Jobs arrived at the San Francisco federal building last week for the interview "flanked by lawyers,"....
...And bearing peace offerings of iPod Videos, MacBookPros, and iMacs...