Apple's Jobs summonsed over latest backdating charges

Posted:
in General Discussion edited January 2014
Apple chief executive Steve Jobs and other members of the company's leadership have been summonsed to appear before a court as part of a new lawsuit regarding the electronics maker's long-running options backdating scandal.



The latest claim come by way of the Boston Retirement Board, which is seeking to prove the company's directors wasted more than $105 million on the extra value of backdated stock options granted to Jobs, according to FindLaw.com.



The pension fund alleges that it now has specifics to back up its charges, which it reportedly gathered from a records inspection action initiated earlier in the Santa Clara County Superior Court.



It has yet to disclose those details, however, because the court has not yet ruled on how the confidential information should be treated. As such, the suit says, those specifics might have to go into an amended or sealed version of the complaint to be filed later this year.



Over the past two years, various other Apple shareholder groups have seen their lawsuits over the backdating issue dismissed or stalled for lack of evidence. This was most recently the case with a suit brought about by the the New York City Employees' Retirement System.



A California judge granted Apple's motion for dismissal in that case back in November, allowing the investors leave to refile an amended complaint as part of a derivative suit.



As part of his ruling, the judge noted that Apple's stock price didn't fall as a result of the backdating, which is somewhat of a prerequisite for most shareholder claims against corporations in similar matters.



That suit, the new complaint filed this week, and all those similar, have concern the Apple Board's approval of hundreds of millions of stock options for Jobs and other top-level executives from 1997 to 2001, which the company admitted to in October of 2006.



"The documents Apple has produced provide critical details about Apple's backdating practices and confirm that all of Apple's directors were aware of and participated in the backdating scheme," the latest complaint says.



Among those other members of Apple's leadership summonsed as part of the suit are William Campbell, Millard Drexler, Arthur Levinson, Jerome York, Gareth Chang, Edgar Wollard, Fred Anderson and Nancy Heinen.
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Comments

  • Reply 1 of 64
    crebcreb Posts: 276member
    Even if the allegations are true, they are minor in comparison with what others have done and continue to do in the world of big corporations.
  • Reply 2 of 64
    gqbgqb Posts: 1,934member
    I'm as repulsed as the next guy by the multi-multi-million$$$ parachutes being given to the execs who run their companies into the ground and causing general economic turmoil, but if there was ever a case of exec(s) who've earned whatever can be thrown at them, its Jobs et al.

    What part of "you'd be making zero money on your investment and the company would be now out of business without Jobs" don't these funds understand?

    Exactly what are they trying to accomplish?

    Show me the harm.
  • Reply 3 of 64
    solipsismsolipsism Posts: 25,726member
    "As of 17 November 2006, backdating has been identified at more than 130 companies, and led to the firing or resignation of more than 50 top executives and directors of those companies. Notable companies embroiled in the scandal include Broadcom Corp., UnitedHealth Group and Comverse Technology.

    Some of the more prominent corporate figures involved in the controversy currently are Steve Jobs and Michael Dell. "



  • Reply 4 of 64
    sapporobabysapporobaby Posts: 1,079member
    Quote:
    Originally Posted by CREB View Post


    Even if the allegations are true, they are minor in comparison with what others have done and continue to do in the world of big corporations.



    So, are you saying they should be let off because it's Steve "he who must not be named" Jobs?



    The kool aid will be served now.
  • Reply 5 of 64
    foo2foo2 Posts: 1,077member
    "Scheme" is a loaded word, isn't it? Perhaps the entire board knew a backdating scheme could be used to make more lucrative awards, but did they know the backdated shares were not going to be properly costed? I'd guess the plaintiffs will be hard pressed to prove that.
  • Reply 6 of 64
    I thought the board of directors was just trying to repay Steve Jobs for all that he has done for the company.(one dollar a year is kind of low) If this is a lawsuit by people genuinely interested in apple why are they doing it. If Steve Jobs goes the stock price will plummet.









    Edit:

    Is backdating illegal
  • Reply 7 of 64
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by sapporobaby View Post


    So, are you saying they should be let off because it's Steve "he who must not be named" Jobs?



    The kool aid will be served now.



    He's pointing out that it...

    A) Is a practice not isolated to Apple

    B) Has been much more heavily abused in other companies



    The SEC has cleared Jobs so this appearing in court is to damn others, not himself.
  • Reply 8 of 64
    sapporobabysapporobaby Posts: 1,079member
    Quote:
    Originally Posted by solipsism View Post


    He's pointing out that it...

    A) Is a practice not isolated to Apple

    B) Has been much more heavily abused in other companies



    The SEC has cleared Jobs so this appearing in court is to damn others, not himself.



    I reiterate. Is Steve Jobs above the law? If found guilty, should he go to jail, be fired, exiled to PIXAR, forced to use only an iPhone as a communication device?



    *** disclaimer *** Blind follower status will be determined upon answering the question.



    Personally, I hope that he is completely cleared and this is put to bed, but if he and his did wrong then they have to pay.
  • Reply 9 of 64
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by sapporobaby View Post


    I reiterate. Is Steve Jobs above the law? If found guilty, should he go to jail, be fired, exiled to PIXAR, forced to use only an iPhone as a communication device?



    *** disclaimer *** Blind follower status will be determined upon answering the question.



    If found guilty he should be punished in accordance to the law, just like everyone else. But this appears to be a civil case. If so, Jobs and gang can't go to jail. And as previous stated, the SEC has already cleared him of any criminal activity.
  • Reply 10 of 64
    Quote:
    Originally Posted by sapporobaby View Post


    Is Steve Jobs above the law?



    Yes.



    Any more questions?
  • Reply 11 of 64
    Quote:
    Originally Posted by sapporobaby View Post


    So, are you saying they should be let off because it's Steve "he who must not be named" Jobs?



    The kool aid will be served now.



    I am not a lawyer, however I do not believe there are any "They". This is a civil matter and not a criminal investigation. To my knowledge the criminal investigation has concluded.



    At the end of the day, Apple not Steve, would end up paying any money to this group if found guilty.



    To my knowledge such fines would hurt Apple bottom line, which in turn would hurt the value of the shares and as such hurt the shareholders. Are they then going to suit themselves because the suit they brought hurt the stock holders?



    These people look like they are going for blood, I am not sure this is really a money issue. However because it is not a criminal matter, they are not likely to get Jobs in any trouble.



    Just my believe, correctly or incorrectly.



    This is getting to be a soap opera along the lines of "All my Children".



    Agreed, guilty people/corporations should be punished, however there is a time and a place, dragging the issue/story (for 40 seasons) may not be good for anyone.



    Lets do whatever and move on.
  • Reply 12 of 64
    mr. hmr. h Posts: 4,694member
    Quote:
    Originally Posted by diskimage View Post


    Is backdating illegal



    No.



    What's illegal is not accounting for the backdating correctly. The board "knowing about a backdating scheme" is hardly damning, there's nothing illegal about backdating. Now, if the board "knew the backdating wasn't being accounted correctly", that would be damning.
  • Reply 13 of 64
    Fred Anderson, the previous CFO and suspicious foreigner, has already been found guilty of this fiddling of the books.



    He clearly contradicted Steve Jobs' explicit instructions to "not give me anymore money, especially by devious means, I already have more than I can possibly spend in 10 lifetimes". Totally disregarding what he was just told, Anderson promptly handed Jobs a few million more for some sinister purpose of his own, which will be revealed in the fullness of time.



    By paying the hefty fine Anderson admitted his guilt. I hope should Jobs be found guilty, by some incredible miscarriage of justice, that Anderson will have the decency to serve Jobs' sentence for him.



    Given that Steve Jobs is only paid a dollar year to be CEO of Apple, he is clearly not doing it for the money, or the $750 million a year of perks.



    He is doing it for the love of all Mac users everywhere, and that includes you and me, honeychil'.
  • Reply 14 of 64
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by diskimage View Post


    Is backdating illegal



    Only if it's not properly reported on the right lines of the tax forms and the SEC filings.



    What makes the practice untoward is that options awards are presumed to be priced when it's made. Then those awarded options might try to have the date of the award altered so they can get a lower price. The company has to pay that additional difference too, when they're exercised.



    While I don't know if he's truly guilty (he's legally not guilty), but I really don't buy this "the company's still doing fine, let him off" vibe. If he wanted more pay, I think he should have asked for it through proper channels than basically write himself a check without oversight. He runs the company, but he only owns a portion of it.
  • Reply 15 of 64
    SpamSandwichSpamSandwich Posts: 29,346member
    Sarbanes-Oxley was the worst thing to happen recently to US businesses. Laws on the books prior to it already protected investors from fraud. Just because of the abhorrent actions of the executives of one company, Enron, and our sitting president taking a personal interest in matters did this abortion go forth, severely affecting US competitiveness.
  • Reply 16 of 64
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by SpamSandwich View Post


    Sarbanes-Oxley was the worst thing to happen recently to US businesses. Laws on the books prior to it already protected investors from fraud. Just because of the abhorrent actions of the executives of one company, Enron, and our sitting president taking a personal interest in matters did this abortion go forth, severely affecting US competitiveness.



    Enron was the worst of it, but they're hardly the only ones that practiced devious deeds.



    SOx probably should be repealed though.



    I'm not sure what this has to do with it though, this stuff in the lawsuit is pre-SOx.
  • Reply 17 of 64
    These people are ridiculous. Look at all these execs making tens of millions running their companies into the ground. CEO after CEO leave companies with stock prices lower than when they signed on and take huge compensation packages. NOT ONLY THAT, BUT STEVE JOBS NEVER EXERCISED HIS OPTIONS. PERIOD. He forfeited them and was given stock instead. Therefore, it doesn't matter what they were dated as they were never used.



    As a longtime Apple shareholder, if the board decided today to give Steve an additional billion dollars of stock as reward for a job well done, that would still be a bargain for the company and for me as a shareholder. Give Steve a break. These people are not real shareholders in the fact that they are not interested in how the company does. It is lawyers trying to make a name for themselves.



    Let's take a look at how other companies have performed over the previous 5 years.

    http://finance.yahoo.com/q/bc?t=5y&s...TC%2CIBM%2CHPQ



    Anyone who was an investor in Apple, one of the best performing companies over the past 5 years, should not have one word of complaint regarding how this company was run or executive compensation, etc.
  • Reply 18 of 64
    aaarrrggghaaarrrgggh Posts: 1,558member
    Steve's $1 salary gives him a bit of wiggle room on a lot of this... but it is wrong none the less.
  • Reply 19 of 64
    S-Ox has nothing to do with this. And, it was a lot more than Enron (for starters, it was the overall mileu of Worldcom, Adelphia, Tyco, Xerox, GE, the telecom meltdown, the dotcom meltdown, analyst conflicts, etc).



    And, opinions in the scholarly literature vary widely over the effectiveness of S-Ox (I would be happy to give you a couple of references if you wish). I am not a fan of S-Ox myself, but many executives that I have spoken will tell you that the while one-time costs (esp. IT and control system design costs) of complying were high, they are sort of glad that S-Ox did happen, since a lot of it was stuff they needed to get done anyway.



    (Oops.... that was meant to be in response to SpamSandwich).
  • Reply 20 of 64
    lkrupplkrupp Posts: 6,084member
    Quote:
    Originally Posted by GQB View Post


    I'm as repulsed as the next guy by the multi-multi-million$$$ parachutes being given to the execs who run their companies into the ground and causing general economic turmoil, but if there was ever a case of exec(s) who've earned whatever can be thrown at them, its Jobs et al.

    What part of "you'd be making zero money on your investment and the company would be now out of business without Jobs" don't these funds understand?

    Exactly what are they trying to accomplish?

    Show me the harm.



    Simple answer. They want some of that $19+ billion in cash. Nothing about the world of stock traders, investment firms, and pension funds is about the quality, stability, sustainability or future of any company. It's about how much money they can wring out of the company RIGHT NOW. If they can get a few hundred extra million out of Apple that will be just fine with them. And they will dump the stock in a heartbeat if they think they can get more money from somebody else.



    So don't take it personally. The pension funds could care less if Apple survives with or without Steve Jobs. They really, really don't care as long as their money is protected. It's vicious circle. A company generally can't raise enough capital unless they go public and sell shares. But once they do that they also usually lose some aspect of control because the stockholders want to see their stocks increase in value and they will do ANYTHING to make that happen. Just look at the Yahoo/Microsoft battle. Yahoo stockholders only care about whether they will get a premium price for their Yahoo stock. They DON'T care about whether this will be good for Yahoo or the industry at large. Another example is that creepy bastard Carl Ichan.
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