Apple Faked Documents to Back Date Options for Steve Jobs

Steve Jobs is one of the creators of the personal computer, and his iPod has changed how one gets and listens to music and video forever. The Financial Times reports that, back in 2001, he was awarded 7.5 million stock options without the required OK from the board of directors. Worse, there are apparently forged documents purporting to show that a board meeting was held. Someone needs to go to jail.

There are currently 160 companies, including Apple, that have admitted to back dating stock options. The company investigated matters in October and found, “no misconduct by any member of Apple's current management team,” but the inquiry, “raised serious concerns regarding the actions of two former officers.” Mr. Jobs was cleared of any wrongdoing, he surrendered the options in question and received a block of restricted stock instead.

However, the FT also said, “According to an Apple filing in 2002, the options under review were handed to Mr. Jobs in October 2001, at an exercise price of $18.30 a share. However, the purported board authorisation was dated near the end of the year, suggesting that the benefits were both not properly authorised and were backdated.”

The situation requires a restatement of accounts, and consequently, the company’s 10-K filing (which was due December 15) came out on December 28. The 10-K said in part, “The approval for the grant was improperly recorded as occurring at a special Board meeting on October 19, 2001. Such a special Board meeting did not occur. There was no evidence, however, that any current member of management was aware of this irregularity. The Company has recognized $20 million in stock-based compensation expense for this grant.” So, Apple is sticking to its story, which may well be the truth.

Mr. Jobs certainly doesn’t need the money, and the market has brought the price of Apple stock back up after an initial drop. However, someone at Apple forged documents to cover up this non-meeting. The Justice Department needs to convict the responsible party or parties and throw the book at them. Back dating options is bad, but forgery is unforgivable.

© Copyright 2007 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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