• The Washington Post, Thursday, January 11, 2007 11 AM

Apple Chief Steve Jobs may have deflected some of the controversy surrounding the options backdating scandal with the dramatic unveiling of the iPhone at Macworld earlier this week, but the newspaper, in a detailed analysis of the scandal, concludes that Jobs should technically be out of job for his part in a scandal that spread through the computer maker over the last 20 years.

SEC filings by the Apple chief saw $75 million worth of restricted shares turn into $650 million between 2003 and March of last year. Apple argues that Jobs didn't personally benefit from the restricted shares because he couldn't sell them until he remained at the company for three years.

It was what happened before that is central to the issue. In December 2001, Jobs was issued 7.5 million stock options, but the company recorded a fake meeting in October, so the options grant could be backdated to a time when the company's share price was 15% lower. On January 12, 2000, Apple finalized the award of 10 million stock options, though that date just happens to be at a time when the company's share price was at a six-month low.

At the time, backdating stock options was not technically illegal, but failure to disclose the practice might be, as it artificially inflates a company's share price. Because of this, several executives have been forced out of companies investigated by the SEC for failing to disclose the practice.

Meanwhile, Apple shareholders have filed lawsuits against the company for inflating the share price, although Apple continues to fiercely defend Jobs, whose vision has been central to the company's turnaround in recent years, and other company executives.

Read the whole story at The Washington Post »