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Backdating Scandal Hits Apple's Steve Jobs

Steve Jobs is in more trouble after an SEC filing revealed that the Apple chief executive was handed 7.5 million stock options in 2001-- without proper authorization from the company's board of directors. Later, records were forged to indicate that a full board meeting had taken place to approve stock option grant.

The SEC has now to decide whether to pursue legal action against the company or any specific individuals involved in the incident. A regulatory filing indicating the extent of the transgression should be unveiled by the end of the week. In October, Apple and Jobs issued a contradictory statement saying that the CEO had not exercised his options and would instead take a grant of restricted stock.

More than 160 companies have owned up to stock-option backdating in the last year. While not technically illegal before the passage of Sarbannes-Oxley a few years ago, companies were expected to own up to it.

Options backdating refers to companies allowing employees to exercise their grants at prior dates that yield more favorable results. Many, including Apple, have not done so until this year, which led to the departure of numerous CEOs. If Steve Jobs and Apple are taken to court for forgery and failure to disclose options backdating, don't expect Jobs to be around much longer at Apple.

Read the whole story at Financial Times »

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