4 replies to this topic

[jawndissedi]

Bloomberg

. . . maybe I can get Vector or da Chief to manage my account.

Edited by jawndissedi, 07 January 2007 - 09:57 PM.

[greenie]

Very scary for bears. I never heard a successful crash call. If Mainstream Media makes a crash call, we may be ready for a meltup.

[dcengr]

I'm short AAPL and this makes me nervous too..

Apple's Jobs May Still Face U.S. Scrutiny Over Stock Options

By Karen Gullo and Connie Guglielmo

Jan. 8 (Bloomberg) -- Apple Computer Inc. Chief Executive Officer Steve Jobs, exonerated by the company's board last month in a stock-options scandal, may still face scrutiny from U.S. investigators.

The Securities and Exchange Commission and the Department of Justice may question Jobs as they probe whether current and former Apple executives, directors and others committed fraud by backdating some stock-option awards to inflate their value, said criminal defense attorneys who formerly worked at those agencies.

Apple said Dec. 29 that 6,428 stock options issued between 1997 and 2002 were backdated. That included one grant to Jobs marked as approved at a special board meeting that never occurred. Jobs recommended some favorable dates on options other than his own. Apple, which found ``no misconduct'' by Jobs, didn't say which options the CEO backdated or why it faked a board meeting.

``The SEC and the Justice Department are not bound by the company's conclusions,'' said San Francisco-based attorney Jahan Raissi, a former senior counsel in the SEC's enforcement division. ``They have far more powerful tools to force people to talk to get information.''

Federal Investigation

Cupertino, California-based Apple, maker of the iPod music player and Macintosh computer, is among the largest of the more than 195 companies embroiled so far in a stock-options scandal that broke last year.

Prosecutors will want to know what Jobs, 51, was told in meetings and in telephone calls and if any advice was given to him by outside attorneys, said Robert Mintz, a white-collar criminal defense attorney in Newark, New Jersey, and former assistant U.S. attorney in New Jersey.

A person familiar with the matter said Oct. 5 that federal prosecutors in San Francisco are investigating Apple's backdating of stock options.

The computer maker's revelation that Jobs chose some of the dates for options grants will prompt investigators to explore his role, said William Portanova, a white collar criminal defense attorney in Sacramento, California, and former U.S. prosecutor in California.

``They admitted he knew what was going on and picked the dates,'' Portanova said. ``Nobody is out of the woods until the SEC and DOJ say they are out of the woods.''

Hiding Costs

Stock options allow holders to buy shares at a later date, usually at the market price the day they were granted. Backdating options to days with low prices inflates their value. If not properly disclosed, the practice may break laws because it hides costs from shareholders and regulators.

SEC spokesman John Nester in Washington wouldn't comment specifically about Apple, though he said internal company reviews don't preclude an SEC investigation. ``It's a tool that can expedite the resolution of a matter, but it's not a substitute,'' Nester said.

U.S. Attorney Kevin Ryan in San Francisco declined to comment on the company. In general, while a company's internal investigation ``can be helpful in our investigation, we exercise our own due diligence in determining whether federal criminal prosecution is warranted,'' Ryan said.

Apple set up a special committee to run an internal review of the options grants after disclosing in June there may have been problems with awards. It was led by former Vice President Al Gore, a member of the company's board since 2003, and director Jerome York, who was a member of the compensation committee in 2001 when the backdated grant to Jobs was made.

Jobs and Gore

Jobs served on the advisory board of Gore's Current TV cable channel, the San Francisco-based company said in a May 2004 press release. He has contributed $252,700 to Democrats since 1996, including $26,700 to the Democratic Congressional Campaign Committee in June, according to federal campaign contribution records compiled by the Center For Responsive Politics, which tracks money in politics.

He gave former U.S. Senator Bill Bradley $500 in 1999 and hasn't contributed to Gore, the records show.

Neither Jobs nor Apple have made any financial contributions to any of Gore's projects: The Alliance for Climate Control, Current TV or Generation Investment Management LLP, said Apple spokesman Steve Dowling. There is no financial relationship between Jobs and Gore, Dowling said.

The Gore committee cleared Jobs and other current management of wrongdoing after an investigative team spent more than 26,500 man-hours searching more than 1 million paper and electronic documents. More than 40 current and former directors, officers, employees and advisers were also interviewed, the company said.

Cleared Jobs

The disclosure eased some investors' concerns that Jobs, credited with leading a revival at the company since returning as CEO in 1997, might be forced to step down.

Apple shares rose 4.9 percent the day of the exoneration. They fell 61 cents to $85.05 in Nasdaq Stock Market composite trading Jan. 5. They gained 18 percent last year after more than doubling in 2005.

Jobs and Apple may also be forced to provide more details to lawyers representing shareholders suing the company. ``They have not disclosed near enough information,'' said Nell Minow, editor at the Corporate Library, a corporate governance research firm in Portland, Maine. Apple faces a federal lawsuit in California that consolidates 11 shareholder complaints over backdating.

``You want to see a very specific discussion of what steps they took, what questions they asked, what researchers they used,'' Minow said.

Options for Jobs

In 2001, Jobs received options on 7.5 million shares. The terms of the grant were completed Dec. 18 of that year, when Apple's shares were trading at $21.01, Apple said. Oct. 19 was chosen as the grant's date, giving Jobs a lower exercise price of $18.30.

The company told shareholders in a March 2002 regulatory filing that the grant was approved at a special board meeting in October 2001. Apple disclosed last month that the meeting never took place. No member of current management was aware of the ``irregularity,'' the company said.

Apple said it recorded $84 million in charges to correct its accounting for the backdated options, including $20 million for Jobs' 7.5 million share award. Jobs voluntarily canceled that grant and other outstanding options in March 2003.

He chose to do so to make more stock available for employees, Apple said in an SEC filing at the time.

Restricted Shares

Instead, the board gave Jobs 5 million shares of restricted stock, which vested in March 2006. At the time, the shares were worth $646.6 million.

Apple said the actions of two unidentified former officers involved in accounting, recording and reporting of stock options grants had raised ``serious concerns.''

Former Chief Financial Officer Fred Anderson, whose tenure included the five years when options were manipulated, resigned as a director in October after Apple first reported the results of its internal review. Jerome Roth, Anderson's San Francisco- based attorney, said his client wasn't involved in any ``knowing manipulation'' of options.

Apple's top lawyer Nancy Heinen, who joined Apple in September 1997 after Jobs returned as CEO, resigned last May.

``We strongly deny any and all accusations of intentional wrongdoing on her part,'' said Cristina Arguedas, Heinen's lawyer in Berkley, California.

[caspary]

Bloomberg

. . . maybe I can get Vector or da Chief to manage my account.

Oh dear, they have been calling doom since 2003. Every year since we get these doom reports. But it never comes. Even housing they have been predicting doom and crash for last 6 years and all we have is a small drop in housing. Everything looks hanky dory to me right now, low rates, low crude, employment great (maybe too great:)

i don't want to excite anyone here with my bullishness (that is not backed by charts), but this week I think crude/oil stocks will scorch, and so will rest of the market especially with "Wireless in Las Vegas" being played over and over in the media. Watch RIMM AAPL etc techs

[pdx5]

That article stopped my thoughts in its tracks!

But then again I saw this article http://www.bloomberg...p;refer=economy]

and my bullish impulses vanished!

Edited by pdx5, 08 January 2007 - 02:51 AM.