Gov't seeks more information from Apple on options mess

Posted:
in General Discussion edited January 2014
Apple said Thursday it has received an informal requests from the U.S. government to turn over documents and additional information related to its past stock options practices.



The request followed the company's own review of the matter, which turned up more than 6,400 option grants with inaccurate dates between the years of 1997 and 2002.



"The Company intends to continue full cooperation," Apple said in a regulatory filing with the Securities and Exchange Commission. "The resolution of these matters will be time consuming, expensive, and will distract management from the conduct of the Company?s business."



In December, Apple announced that it would incur an $84 million charge for the bulk of the fortuitously granted options. However, it maintained that a special committee of outside directors "found no misconduct by current management."



In its filing Thursday, the Cupertino-based company warned that adverse findings by authorities could result in additional damages or penalties, which could harm its business, financial condition, results of operations and cash flows.



According to news reports earlier this month, chief executive Steve Jobs was questioned on the matter in San Francisco by officials from both the Justice Department and the Securities and Exchange Commission.



The issue surrounding Jobs, which has been a focal point of investors, revolves around a misdated grant for 7.5 million options that was issued to him in 2001.



Apple has admitted that over the years Jobs was aware or recommended the selection of some favorable grant dates, but said he did not receive or financially benefit from any of those grants or appreciate the accounting implications.
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Comments

  • Reply 1 of 35
    Quote:

    Apple said Thursday it has received an informal requests from the U.S. government to turn over documents and additional information related to its past stock options practices.



    To start off, what do you mean? A single informal request, or more than one :S



    -tj
  • Reply 2 of 35
    What does informal mean? If the government requested it, isn't that formal?

    I doubt that Apple posted this story yesterday, since the information all comes from their SEC filing at the end of December. This sounds more like some stock shorters are attempting to manipulate the price.

    The quote about how the process will interfere with the running of the company is particularly suspicious, since Apple would never make a statement like this, knowing what it would do to its stock price.
  • Reply 3 of 35
    Quote:
    Originally Posted by willrob View Post


    What does informal mean? If the government requested it, isn't that formal?

    I doubt that Apple posted this story yesterday, since the information all comes from their SEC filing at the end of December. This sounds more like some stock shorters are attempting to manipulate the price.

    The quote about how the process will interfere with the running of the company is particularly suspicious, since Apple would never make a statement like this, knowing what it would do to its stock price.



    Agreed.
  • Reply 4 of 35
    wallywally Posts: 211member
    Quote:
    Originally Posted by willrob View Post


    What does informal mean? If the government requested it, isn't that formal?



    I think it meeans that the government showed up on Apple's front door dressed in Levis and "wife-beaters", and said: "Howdy!, hey could you give us a few receipts pardn'er?"



  • Reply 5 of 35
    If the source of this information was the SEC, provide a link to the document or statements attributed to them. No more bull.
  • Reply 6 of 35
    eckingecking Posts: 1,588member
    Just another case of "The Man" tryin' to keep a fruit company down.
  • Reply 7 of 35
    Quote:
    Originally Posted by ecking View Post


    Just another case of "The Man" tryin' to keep a fruit company down.



    When life's a drag, wear a dress.
  • Reply 8 of 35
    louzerlouzer Posts: 1,054member
    Quote:
    Originally Posted by willrob View Post


    What does informal mean? If the government requested it, isn't that formal?



    An informal request is just that, the guys doing the investigating saying "Hey, we'd like some more info, mind providing it?" A 'black-tie' request would be an official document coming from the investigators indicating what they need and when they want it. A 'white-tie' request is called a subphoena (however you spell it).
  • Reply 9 of 35
    "Apple has admitted that over the years Jobs was aware or recommended the selection of some favorable grant dates, but said he did not receive or financially benefit from any of those grants or appreciate the accounting implications"



    So why would you even want a favorable grant, if you're not going to make a profit. Sounds like bullshit to me.
  • Reply 10 of 35
    Quote:
    Originally Posted by BlackSummerNight View Post


    "Apple has admitted that over the years Jobs was aware or recommended the selection of some favorable grant dates, but said he did not receive or financially benefit from any of those grants or appreciate the accounting implications"



    So why would you even want a favorable grant, if you're not going to make a profit. Sounds like bullshit to me.



    as has been stated in the past, receiving backdated stock options is not illegal in and of itself. it's not reporting the those options correctly that is illegal. it's possible that once they realized that the options were not recorded properly that he just gave them back so as not to benefit from the profit.
  • Reply 11 of 35
    So I guess they will look to see when the options were given back. I'm not saying he did anything illegal, nor do I care, but the entire ordeal stinks.

    Quote:
    Originally Posted by admactanium View Post


    as has been stated in the past, receiving backdated stock options is not illegal in and of itself. it's not reporting the those options correctly that is illegal. it's possible that once they realized that the options were not recorded properly that he just gave them back so as not to benefit from the profit.



  • Reply 12 of 35
    Quote:
    Originally Posted by willrob View Post


    What does informal mean? If the government requested it, isn't that formal?

    I doubt that Apple posted this story yesterday, since the information all comes from their SEC filing at the end of December. This sounds more like some stock shorters are attempting to manipulate the price.

    The quote about how the process will interfere with the running of the company is particularly suspicious, since Apple would never make a statement like this, knowing what it would do to its stock price.



    Quote:
    Originally Posted by ReCompile View Post


    Agreed.



    Quote:
    Originally Posted by SpamSandwich View Post


    If the source of this information was the SEC, provide a link to the document or statements attributed to them. No more bull.



    It appears in Page 38 of Apple's 10Q filing with the SEC on 2/2/2007 (i.e., today). See http://sec.gov/Archives/edgar/data/3...-2749_110q.htm



    Ai is right on -- there is no short-seller conspiracy here!
  • Reply 13 of 35
    Quote:
    Originally Posted by anantksundaram View Post


    It appears in Page 38 of Apple's 10Q filing with the SEC on 2/2/2007 (i.e., today). See http://sec.gov/Archives/edgar/data/3...-2749_110q.htm



    Ai is right on -- there is no short-seller conspiracy here!



    I should have added: This sort of listing of "risk factors" in SEC filings is (usually) boiler-plate nonsense from all companies, and they rarely amount to much. Just a CYA-type of thing to cover even VERY low probability events (to get a flavor, read the others -- e.g., "terrorism" risk, "global economic" risk etc etc).



    That said, Jobs' options stuff is still potentially problematic -- I side with Ai's judgment on this one, in terms of it being newsworthy.
  • Reply 14 of 35
    melgrossmelgross Posts: 33,323member
    Quote:
    Originally Posted by BlackSummerNight View Post


    "Apple has admitted that over the years Jobs was aware or recommended the selection of some favorable grant dates, but said he did not receive or financially benefit from any of those grants or appreciate the accounting implications"



    So why would you even want a favorable grant, if you're not going to make a profit. Sounds like bullshit to me.



    It's not that simple.



    He could have recommended grants to people OTHER than to himself.



    Backdating is not, in and of itself, illegal. How the company reports, and accounts for it, is important. They must make it publicly reportable to stockholders. They must account for it properly, paying taxes and having it correctly reflect the companies bottom line, etc.



    If that isn't done, the company, and executives who were involved, will be in trouble.



    If a company says, publically, that they are giving options to an employee whom they very much want to stay, and are backdating them for favorable profitability for that employee, and account for it correctly, then there is no problem.



    But, if they lie about it, and don't say what they did, and it doesn't show on the books, there is a problem. If the employee then hides the profits, and doesn't pay all the taxes due, or the company pays it for him (or her), then they will have problems as well.



    S-O changes several reporting requirements.
  • Reply 15 of 35
    Quote:
    Originally Posted by Appleinsider


    In its filing Thursday, the Cupertino-based company warned that adverse findings by authorities could result in additional damages or penalties, which could harm its business, financial condition, results of operations and cash flows.



    Also known as the standard legal cover-your-ass clause. 8) ...Anyone wondering why Apple is releasing all this, it has to keep the SEC well in-da-loop about goings on, and through such means, cover Apple's ass in case profits, revenues, product launches, Leopard, board directors, management, or whatever start heading South.
  • Reply 16 of 35
    Quote:
    Originally Posted by AppleInsider View Post


    "The resolution of these matters will be time consuming, expensive, and will distract management from the conduct of the Company?s business."...



    Indeed. Once iPhone kicks in towards the end of the year and the SEC/FED slug ("the investigation) oozes along a bit, late-2007 will be more back-in-the-swing of things. Pity about the dampening of the stock price this Jan-March quarter. \ <---Which could be due to various factors, yeah.



    2ND HALF 2007 !!!

    1. iPhone

    2. Leopard

    3. Adobe CS3 Universal

    4. Pro Creative purchases

    5. Back to School

    6. Christmas Frenzy
  • Reply 17 of 35
    ouraganouragan Posts: 437member
    Quote:

    The issue surrounding Jobs, which has been a focal point of investors, revolves around a misdated grant for 7.5 million options that was issued to him in 2001.



    [...] Jobs was aware or recommended the selection of some favorable grant dates, but said he did not [...] appreciate the accounting implications.





    A CEO that dumb doesn't deserve his position, nor his fat stock options plan.
  • Reply 18 of 35
    melgrossmelgross Posts: 33,323member
    Quote:
    Originally Posted by sunilraman View Post


    Indeed. Once iPhone kicks in towards the end of the year and the SEC/FED slug ("the investigation) oozes along a bit, late-2007 will be more back-in-the-swing of things. Pity about the dampening of the stock price this Jan-March quarter. \ <---Which could be due to various factors, yeah.



    2ND HALF 2007 !!!

    1. iPhone

    2. Leopard

    3. Adobe CS3 Universal

    4. Pro Creative purchases

    5. Back to School

    6. Christmas Frenzy



    For the first time in years I'm going to watch the Superbowl (not very closely). I don't watch because if the Giants or Jets aren't in it, I'm, frankly, not interested.



    But, Apple will be advertising this year. At least that's what we've been reading.



    Three hours in front of the telly for one ad.



    It had better be good!
  • Reply 19 of 35
    melgrossmelgross Posts: 33,323member
    Quote:
    Originally Posted by ouragan View Post


    A CEO that dumb doesn't deserve his position, nor his fat stock options plan.



    And, I suppose you could do better?



    Here's an interesting article. It's not about Jobs, but he is mentioned in it.



    http://www.thestreet.com/_mktwrm/new.../10336587.html
  • Reply 20 of 35
    Simply means: not in the form of a subpoena.
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