Jan 11
Apple recently announced that the result of their internal
investigation was that there was no wrongdoing on the part of Steve Jobs
in the Apple stock options scandal. More recently, we're
hearing differently as
San Jose Mercury News article
indicates:
- Jobs played an important role in
the company's options practices, not only as the recipient of a
massive tainted grant, but by recommending favorable grant dates for
other employees.- By itself, backdating is not necessarily
illegal, but securities laws require that the grants be properly
accounted for and disclosed to shareholders.- The scandal has
thus far led to indictments against officials at just two public
companies, but federal regulators are promising more to
come.- “Jobs is this essential part of the Apple
legend,'' said Alan Deutschman, author of “The Second Coming of
Steve Jobs.'' “Would people sit through a two-hour presentation
by some other guy waiting for the big revelation at the
end?''Deutschman added: “Jobs always brings the
promise that there's another revolution around the corner, and if
you follow him, you can be part of it. And that has enormous
appeal.''- Ironically, the trait that has been such an
asset for Apple may be a liability for its CEO. Apple has admitted that
between 1997 and 2002 — at the same time that Jobs was trying to revive
the company — it backdated options grants to employees, including Jobs.
By not only being aware, but assisting that process, Jobs may not have
done anything technically wrong — as Apple's board says — but at
the very least he and the company were pushing the boundaries of
accounting rules and corporate ethics.- For now, Jobs' job is
secure. Apple's board has defended him, saying he didn't know
the accounting implications of his actions. But many analysts find that
hard to square with what they know about Jobs. And regardless of the
board's judgment, federal regulators may have a different
view.
If the federal regulators agree that Jobs
knew what was going on, and that it wasn't properly disclosed, he
could find himself in the same jail as a number of other Silicon Valley
hucksters.