It is easy to forget that Apple Inc. (NASDAQ: AAPL) still faces problems with options-backdating accusations. The New York Times was good enough to remind the financial world of that today.

According to the paper, "A CLASS-ACTION lawsuit contending securities fraud and filed last month may force the Apple board to pay some attention."

While the Justice Department may still be looking into the backdating issue, civil suits may be a larger problem. They can be brought by any one of a number of Apple shareholders. They could drag on for years. The trouble could take up substantial management time and create large legal expenses.

Because of Apple's great success, it is easy to forget that the options trouble could go on for the rest of the decade. But, as long as the press wants to push the issue, it will probably be easier for people who want to try to take money from the Apple treasury to keep hanging around.

Douglas A. McIntyre is an editor at 247wallst.com.

Following a series of 2006 reports in The Wall Street Journal on options backdating, the SEC, IRS and, and U.S. Attorney's office began investigating UnitedHealth and more than 100 other companies.

Dr. William McGuire, CEO and chairman, ran UnitedHealth Group (NYSE: UNH) for 15 years, turning what was then a regional insurer into the nation's second-largest managed health care company. Like many companies in the 1990s, UnitedHealth rewarded its chairman and CEO with options to buy company shares at a fixed price. McGuire was allowed to choose the dates for his option awards, and the crux of the backdating accusation is that, to boost the options' value, he picked a date in the past when the share price was lower and signed papers as if he were granted the options on that earlier date.

Due to his involvement in the stock options scandal, McGuire stepped down in late 2006. He was the highest-profile corporate chief caught in the probe.

Electronic Arts (NASDAQ: ERTS) is spending about $167 million for a 15% share in The9 (NASDAQ: NCTY), one of China's largest online game operators. In March, Electronic Arts bought 19% of NeoWiz, a Korean company, for about $105 million.

While these moves into Asia are part of a strategic initiative to develop a stronger distribution network in the region, it got me wondering: If Electronic Arts is in a buying mood, what about Take-Two Interactive Software Inc. (NASDAQ: TTWO)? The company has been plagued by just about every scandal imaginable: options backdating, overstated earnings, porn in video games, etc. But after major institutional investors ousted the company's slimy management, things could be in store for a turnaround. and investors who are fed-up with the company's underperformance may want it to explore a sale.

The prices paid for The9 and NeoWiz might make Take-Two look inexpensive, with its market cap of $1.4 billion, and strong brands, mainly the Grand Theft Auto series (I don't normally play video games, but Grand Theft Auto is amazing).

The shares were up almost 3% today, so maybe investors think Take-Two is a takeover candidate, too. I wouldn't be buying the stock here, given all the problems that are still dogging the company, but there's no arguing that its brands have a lot of value.

Fred Anderson, Apple's Inc.'s (NASDAQ: AAPL) former CFO has settled charges that he did not properly oversee options grants. He has paid the SEC $3.5 million and did not admit or deny the allegations. The company's former general counsel still faces her day in court.

As a goodbye kiss to Apple, Anderson put out a statement that fundamentally accused Steve Jobs and the board of being the real bad guys.

Among the points he made:

"Fred relied on these statements by Mr. Jobs and from them concluded the grant was being properly handled."
"Mr. Anderson understood that the Board of Directors, which consisted of sophisticated corporate executives of national stature, including the former Chief Financial Officer of IBM, verified the January 17 date by signing in early February 2001 a Unanimous Written Consent."

Apple's stock is up slightly, which means that the market views Anderson's farewell as bitter grapes. But, the show may not be over.

Douglas McIntyre is a partner at 24/7 Wall Street.

Disney has concluded its review of options grants for Pixar, the Steve Jobs-controlled animation company it acquired, making Jobs the largest shareholder in Disney.

According to the Wall Street Journal (registration required), Disney came to the conclusion that, although there was options backdating at Pixar, Jobs was not involved. A question about his role in Apple's options backdating problems is still being examined by the federal government ,although the Apple board has said that Jobs has been cleared of wrong-doing. It is not clear whether the government will look at the Pixar options.

The announcement by Disney still leaves Jobs in a peculiar position. He served as CEO of two companies that have been involved in the options backdating scandal, he has been cleared by two boards, but his position in government investigations is not clear. It would appear to increase his jeopardy, at least compared to when the investigations at Apple began.

At both Walt Disney Co. (NYSE:DIS) and Apple Inc. (NASDAQ:AAPL), it appears that the boards are not willing to say that the "buck stopped" with Jobs. How the government will see it is another matter.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Jim Cramer frequently talks about the importance of flexibility in investing: as he paraphrases John Kerry, you have to be "Willing to vote for a stock...before you vote against it." However, saying that you had a different opinion on a stock after the fact isn't being flexible: It's lying. It's the Wall Street equivalent of saying you knew the Red Sox were gonna pull it off down 3-0 in the 2004 American League Division Series.

Yet according to research by Alexander Ljungqvist, Christopher Malloy, and Felicia Marston, it appears that analysts may be doing just that: changing their sentiment retroactively to appear more prescient than they really were:

Comparing two snapshots of the entire historical I/B/E/S database of research analyst stock recommendations, taken in 2002 and 2004 but each covering the same time period 1993-2002, we identify tens of thousands of changes which collectively call into question the principle of replicability of empirical research. The changes are of four types: 1) The non-random removal of 19,904 analyst names from historic recommendations ("anonymizations"); 2) the addition of 19,204 new records that were not previously part of the database; 3) the removal of 4,923 records that had been in the data; and 4) alterations to 10,698 historical recommendation levels. In total, we document 54,729 ex post changes to a database originally containing 280,463 observations.

Main market news here

General Motors Corp. (NYSE:GM) Chief Executive Rick Wagoner said he doesn't expect further consolidation in the U.S. auto industry because of overcapacity, throwing cold water on any rumors that his company might try to buy DaimlerChrysler AG's (NYSE:DCX) unit. GM has plenty of its own problems.

From the 20-20 hindsight department. Following the Valentine's Day weather delays that left thousands stranded on planes that never took off, JetBlue Airways Corp. (NASDAQ:JBLU) has hired former FAA official Russell Chew as its chief operations officer effective March 19. That job was previously handled by President David Barger who will be Chew's boss.

The SEC is trying to figure out if and how it should penalize companies that backdated stock options, according to the Wall Street Journal (subscription required). It's not an easy question since many of the cases are running against a five-year statute of limitations, the paper said.

The Financial Times reported today that the SEC is nearing the completion of a formula to penalize companies for backdating options. While the commissioners remain divided on the issue, the consensus is that the penalty should be related to how much the company benefitted financially from the backdating.

One area of debate is whether companies should be fined large amounts, which would directly harm the shareholders that the SEC is seeking to protect. While there is universal agreement that executives should be fined personally, this is a trickier issue. Fines collected would go into a "fair fund" to be redistributed to shareholders who were harmed. But as anyone who has ever received a payout in a lawsuit related to corporate malpractice knows, legal fees etc. often eat up a substantial amount of the damages.

My feeling is that fining executives enormous sums of money is the best way to combat this.

These days, history isn't being kind to Apple Inc. (Nasdaq:AAPL) CEO Steve Jobs. That's ironic considering how much he's obsessed about what people think of him and the company he co-founded.

Jobs has another legal battle of historical proportions on his hands besides the options backdating scandal. Bloomberg News is reporting (via the Los Angeles Times) that Jobs has lost a battle to demolish a
Spanish Colonial style mansion he owns near San Francisco.

A preservation group sued after the city of Woodside and Jobs didn't consider alternatives to destroying the 17,250-square foot mansion, which Jobs bought 21 years ago and has never liked, Bloomberg says.

Perhaps Jobs can figure a way to preserve the Jackling House, named after copper magnate Daniel C. Jackling. Maybe he can restore it its original glory. While he's at it, he might take a stab trying to mend the damage to his reputation caused by the options backdating mess.

These have got to be tough times for the tech mogul. Jobs, who made his fortune looking ahead, now has to spend quite a bit of time looking back.

Options backdating scandals have felled many a tech CEO, and KB Home (NYSE:KBH) had the unlikely distinction of being an unlikely choice for an options backdating scandal. The company's CEO, Bruce Karatz, resigned today over stock options misdeeds. Jim Cramer (among others) didn't mourn him much, however, and said it's actually a good thing. Cramer says you have to go buy shares of KBH, because as the options scandal pressures a stock down, then it inches up, and then on the resolution of the scandal you must buy. With the CEO resigning, that is now out of the way.

Cramer said that even if you back-date options you have to think you are looking out favorably on the company down the road anyway. If a CEO was willing to take stock over cash then you should be inclined to take his lead. He thinks at 1.25 times book value that is a very cheap price. It has almost no debt. It could be a takeover target because it is so cheap. Cramer thinks private equity buyers could do it, or even a Lennar Corporation (NYSE:LEN).

KBH is widely and wrongly perceived as a California and Las Vegas homebuilder, but that isn't the whole truth, says Cramer. California is now 31% of sales and the company builds homes in 13 states. When California comes back, so will KBH. It also builds award-winning neighborhoods. He said he didn't like it when the shares were super-high, but now closer to lows he likes it.

Lynn Turner, a managing director of institutional investing service Glass Lewis put it this way: "I would say that Jobs and the Apple board threw Fred (former Apple CFO and board member Fred Anderson) under the bus to keep it from hitting them." Charles Elson from The Center for Corporate Governance made the observation that, "In the end, it will really be up to the SEC to decide."

The options issue at Apple Computer Inc. (NASDAQ: AAPL) is not over, no matter how much the company wants the market to think it is. High profile cases make careers, and at the SEC and the U.S. Attorney's Office, an opportunity like this comes along only every few years.

With earnings just around the corner, the real risk to Apple's share price is probably not the number of iPods the company sold last quarter, although that could push the stock one way or the other near-term. With CEOs at high profile companies like CNET and McAfee moving out the door, the issue of what Steve Jobs' role in options grants was remains open.

With Apple's stock up from $50.67 on July 14 to $75.02, a piece of negative news that brings Jobs closer to the options back-dating issue would surely cause the stock to fall. With the government looking into how complete and accurate the Apple board's probe was, investors probably do not have long to wait.

Douglas McIntyre is a partner at 24/7 Wall St.

At my alma mater, The Wharton School, white collar crime is taken seriously. After all, Wharton is famous for turning out such brilliant luminaries with questionable ethics (and, in many cases, stints in prison), such as Michael Milken Joseph Jett [Jett, it turns out, is not a Wharton grad and he disputes his involvement in the scandal that took down Kidder Peabody; he describes that in detail in comments below]. Business ethics is taught with a white-knuckled intensity that makes a student wonder where the dean lies on the scale between between concern and abject terror that more scandals will erupt.

Peace be with you, Dean Harker. Your graduates appear to have learned the difference between insider trading and friendly stock tips, fudging and felonies. Unfortunately, it seems that the vast majority of corporate America is ill-educated in the ways of the ethical standard. Because they're falling like so many bright orange oak leaves.

While we all wonder, will Steve Jobs be next?, we watch the mighty fall. George Samenuk (Brown University, political science) was quite the success story. He was a manager at IBM for years before taking over as Chairman and Chief Executive of McAfee, Inc. (NYSE:MFE). Today he quit over options backdating, while at the same time firing President Kevin Weiss (Princeton University, unspecified BA). Ouch! Double whammy.

While the boardroom at McAfee was all a-tizzy with pink slips and hot red faces, Shelby Bonnie (University of Virginia's famed Commerce School then Harvard Business School for MBA) at CNET Networks, Inc. (NASDAQ:CNET) was learning that his bio would momentarily be removed from the company's web site. He resigned his Chairman and CEO roles, with a bit of urging I'd imagine.

Notice something? All of these fine gentlemen have Ivy League educations. None of them, however, from Penn.

I guess the ethics education works! Ahem. Harvard? Princeton? Brown? UVa? Y'all may want to take a look at your coursework there. Or maybe just that sense of overarching fear might work. Or you could try the paddle!

The options back-dating problems at Apple Computer Inc. (NASDAQ: AAPL) are getting worse.

First, it was disclosed that Steve Jobs knew about the practice but did not benefit. He also claims he did not understand the accounting implications. He does have an IQ of over 200. Now, US prosecutors have started an investigation and the company's former CFO has resigned from the board.

Of course, in the case of Hewlett-Packard, very few people would have guessed early on the that company's former chairman would be eventually indicted. So, the issue of what will happen at Apple is clearly still open.

If it is discovered that Jobs was more involved in the scandal than the company let on, who would replace him?

Among the candidates:

• Phil Schiller -- He is the long-time head of global product marketing. He has been with the company since 1997 and has been critical in most product launches.
• Tim Cook -- The company's COO. He had a long career at IBM. He also heads the Mac division.
• Tony Fedell -- One of the fathers of the iPod; he has an engineering background. He is a former executive at Philips Electronics.
• William Campbell -- One of Apple's leading directors. He has run a large public software company, Intuit.
• Jerome York -- Although he is over 70, York has experience operating troubled companies. He was CFO of IBM and a member of that company's board. He is also on the GM board.
• Jim Allchin -- Head of platforms and services at Microsoft. He intends to retire with the the launch of Vista. Allchin has an engineering background.
• Sue Decker -- The highly regarded CFO of Yahoo! She has a Wall St. background and now runs several key divisions at Yahoo!
• John Thompson -- The highly-regarded CEO of Symantec, has a background in running a large software company and is well liked on Wall Street.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Uh-oh.

The corporate scandal machine seems to be spinning ever-wider as the Wall Street Journal online shows Breaking News [updated with link, subscription required]: "Apple says an investigation has shown that CEO Steve Jobs was aware of options backdating at the company, but didn't benefit from the practice."

Full story coming soon. But the full story on options backdating has already been playing out across the U.S., and indeed, worldwide markets. Apple Computer, Inc. (NASDAQ:AAPL) isn't the only company to be accused of the practice, but if Jobs knew about it (and whether he profited seems far beside the point) he might just have to join former CFO Fred Anderson in resigning.

It just goes to show: brilliant innovators do not make smart businesspeople. We've seen it a hundred times this decade if we've seen it once. From Worldcom's Ebbers to the great and mystifying web of lies wrought by Lay and team at Enron, today's business leaders seem to be telling us: we didn't learn from our business ethics classes. We didn't learn from the 80s. We just didn't learn.

When will they learn? And whatever will happen to Steve Jobs? We await, as always, "the full story."