updated 05:00 pm EDT, Mon October 9, 2006
Legal experts on probe
Legal experts are commending Apple for taking charge to remedy its stock option grant scandal, despite the implication of two former executives which raised "serious concern" during Apple's internal investigation. The investigation of irregularities -- which has plagued investors with worries of company chief Steve Jobs possibly losing his position -- made significant progress last week to clear the air around Jobs' apparent lack of involvement with the shady accounting practices. "The company has taken every single appropriate step that can be expected to be taken to identify and remedy the past problems," said Mike Koenig, a criminal defense attorney. "We think Apple will get past this unscathed - as long as it doesn't impact [Steve] Jobs," said analyst Shannon Cross of Cross Research. Jobs assertion that he did not understand the accounting implications of the illegal backdating may also help his case, according to Reuters.
"He didn't know there was rejiggering of the financial results," said James Cox, a Duke University Law School professor. "There's a difference between knowing that the options were backdated and knowing that the numbers that were being produced were misleading," Cox said.
Another attorney said Apple's mistakes seem much less serious than activities allegedly performed by executives of Brocade and Comverse -- which were also involved in stock options backdating -- and that disciplinary action will likely prove more lenient for the Cupertino-based company. "There have been some egregious cases," said George Stamboulidis, an attorney with Baker Hostetler. "But this doesn't sound to have been one of them," Stamboulidis of Apple.