SEC considers looking into Apple

Written by Brett Thomas

December 28, 2006 | 21:13

Tags: #sec #steve-jobs

Companies: #apple

If you somehow missed the wranglings that took place buried three pages down in the business section of your paper, I don't blame you - but here's the chance to catch up. Months ago, a scandal was uncovered - it appeared that Apple had issued Steve-o millions of dollars in stock options in and since 2001, some without any board approval. Now, it looks like that wasn't the end of it.

The options were actually "backdated," or made to look like they were given in a different period than initially reported. At the time this was found out (October of this year), Jobs immediately returned the options, which he hadn't cashed in anyways. However, backdating the options skews accounting quite considerably, and is considered a material fraud.

Since he had returned the funds, it was expected that this rather sordid little chapter in Apple's history could be quietly closed. However, it appears that the US Securities and Exchange Commission (SEC) feels differently. Apple will need to restate several years worth of earnings to properly reflect the issue, and now the SEC is rumoured to be sending federal prosecutors to find out more.

Further rumour on the grapevine says that Jobs may be looking to step down amid the turmoil, despite having already been acquitted of any wrongdoing by the board. In the case of his options, he would never have been responsible for the backdating even if made aware, and he would have needed to truly understand the implications of it to have done anything wrong.

Whether Jobs will stay at the helm of Apple is anyone's guess - but I'd bet that if he did leave, it wouldn't be over something quite this small. It could cause a great disturbance in the force, however, as he's one of the last CEOs that has as much name recognition as the products he helped create.

Either way, Apple may be in for a few bumps in the road. Have you got a thought on the mis-statement? Think Jobs should've known what was happening? Tell us your thoughts in our forums.
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