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AAPL Stock: 102.5 ( + 0.25 )

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Apple takes $84m charge for option scandal

updated 09:20 am EST, Fri December 29, 2006

Apple takes $84m charge

Apple will restate financial data going back to 2002 and take an $84 million ($105 million pre-tax) charge after a board committee found the company had improperly backdated thousands of stock options grants to employees and executives. The company took a a charge of almost $20 million to adjust for Apple CEO Steve Jobs' options, but exonerated current management and Jobs, saying it has "complete confidence" in its chief executive. The additional details of the Apple options backdating scandal were revealed in filings with the Securities and Exchange Commission on Friday. Confirming earlier, Apple said that Jobs was aware of the favorable grant dates and that there was no misconduct by Apple's current management; however, the review added that Jobs recommended some of the favorable grant dates, though he didn't profit from them. Earlier this week, Apple's stock fell as reports surfaced that the Mac and iPod manufacturer falsified authorization of 7.1 million stock options to Jobs and that Jobs hired legal counsel ahead of a pending investigation by the SEC.

Apple's investigation found that Jobs was aware or recommended the selection of some favorable grant dates, but the committee confirmed that he did not receive or financially benefit from these grants or understand the accounting implications. The Special Board Committee also found that the investigation had raised serious concerns regarding the actions of two former officers in connection with the accounting, recording and reporting of stock option grants, according to a report in The Wall Street Journal.

Apple found that 6,428 grants on 42 dates were not properly recorded, but that no adjustments were required for the remaining 35,649 grant during the period between October 1996 and January 2003. In 2002, Apple said it made significant changes in its stock option granting practices in response to evolving legal, regulatory and accounting requirements.




by MacNN Staff

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Comments

  1. jarod

    Joined: Dec 1969

    0

    Finally

    Over and done with. I'm just dying at laughter at all those idiots that sold in the last few days. LOLLLL what a bunch of suckers. Some people simply don't know when to 'think'.

  1. telem

    Joined: Dec 1969

    0

    Stock Is Soaring

    Probably didn't hurt to have Al Gore on the BOD.

  1. marco114

    Joined: Dec 1969

    0

    Still Trouble?

    I'd assume Apple could still be penalized by the SEC for wrong doing. The fact that Jobs recommended certain dates shows he was aware what was going on but it's funny how he didn't act on them. I am sure this stuff started happening to other companies and he decided not to cash in. He still takes very little from the company. It's quite incredible. Probably the least paid CEO vs. company size.

  1. aristotles

    Joined: Dec 1969

    0

    re:Still Trouble?

    If you would have RTFA, Jobs was aware of some of the grants but he was not aware of the accounting implications. As CEO, it was not his responsibility to ensure they were reported correctly. For that, he relied on the CFO to follow up on the issue.

  1. rtbarry

    Joined: Dec 1969

    0

    what does al gore...

    ...have to do with it? these are apple's internal findings, not some outside regulatory review that you might think gore would intervene with. in any case, he holds no sway with the SEC, simply by being a former VP, who lost a run for prez and is unlikely to run again. unless you know something about him that we don't.

  1. chabig

    Joined: Dec 1969

    0

    It's only announced

    The article says it will be handed out at MWSF and available in January...not now. This is good news, though. Garmin promised Mac support at last year's MacWorld and it's nice to see them keep their promise. Are you listening TiVo?

  1. mitchcohen

    Joined: Dec 1969

    0

    That took a while...

    They were "about to release" this at last January's MWSF. Took their good old time, but glad they finally got it together.

    What I really want is their mapping software for their driving GPS systems. They promised that for 2006 too, but given this delay I'm not very optimistic.

    As for the user looking for the download - the story says it'll be available in late January.

  1. elroth

    Joined: Dec 1969

    0

    re: what does al gore...

    Al Gore is on Apple's Board of Directors. Gore apparently was the head of the special committee that did this latest investigation. He has nothing to do with the federal government or the SEC.

  1. Mr. Fartleberry

    Joined: Dec 1969

    0

    Bad Joke

    On the last working day of the year they bring out a fitness program. I guess I got suckered by their promises of Mac compatibility as well. I wish I could get to Macword to rip them a new one in person.

  1. Mr. Fartleberry

    Joined: Dec 1969

    0

    Bad Joke

    On the last working day of the year they bring out a fitness program. I guess I got suckered by their promises of Mac compatibility as well. I wish I could get to Macword to rip them a new one in person.

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