Apple getting squeezed by feds

Posted Feb 2nd 2007 8:15AM by Jonathan Berr
Filed under: Before the Bell, SEC Filings, Bad News, Products and Services, Apple Inc (AAPL), Cisco Systems (CSCO), Employees, Scandals, iPhone, Options

Apple Inc. (Nasdaq:AAPL) was asked to provide more documents to federal investigators looking into options backdating at the company.

The company has provided results of an internal review and independent investigation into the Securities & Exchange Commission and U.S. Attorneys Office. Reuters, citing SEC filings, said the company has been asked for documents and additional information.

Apple is fully cooperating but bluntly noted in the filing that, "Resolution of these matters will be time-consuming, expensive, and will distract management from the conduct of the company's business," the wire service said. Talk about an understatement.

In October, Chief Executive Steve Jobs acknowledged that he knew that he received options grants that were backdated to inflate their value. Though Jobs apologized and Apple investors seem willing to take him at his word. Analysts have said repeatedly that they don't think Jobs is at risk for losing his job. But their opinion isn't the one that counts.

On a happier note, Apple and Cisco Systems Inc. (Nasdaq:CSCO) may be close to ending their spat over the term iPhone. Though the suit remains pending, the companies have agreed to extend the time Apple has to respond so they can work out their differences, the AP reported.

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Reader Comments (Page 1 of 1)

2-03-2007 @ 9:28AM

Terrin said...

Your right. The only opinion that matters is the stockholders. The Board could fire him. The stockholders, however, would fire the Board. The government could possibly try him, but in the unlikely event of victory, stockholders probably would let him run the company from jail.

2-03-2007 @ 3:10PM

Scott said...

I wonder some times about this investigation.

With what 30% of such companies guilty of options backdating, why Apple? They aren't cooking the books to inflate the value of the company in order to deceive stock holders. In fact, the stock holders have been VERY well served by this board. (Personally, I find the whole concept of stock options dishonest, no matter when they are granted; so, it seems to me that changing the grant date is splitting hairs, ethically speaking. If you're going to give your employees stock, give'em stock. Don't make them gamble with it.)

At the risk of sounding paranoid, I don't think Jobs is the real target of this investigation by the Bush Administration's Justice Department. Perhaps someone else is. Perhaps someone who ran against Bush in 2000, is a potential 2008 candidate, and IS on the Apple's board. Like Al Gore.