01/22/2007, 1:25pm, EST
Monday, January 22nd
Apple prosecutors quit government jobs
A new report has revealed that two of the federal prosecutors investigating stock options backdating at Apple have left their government jobs for work in the private sector. MSNBC reports that Chris Steskal, who was a member of the federal task force that originally brought charges in the Apple options backdating scandal in August of 2006, announced his departure just days after his supervisor Kevin Ryan -- who was the U.S. attorney for northern California -- announced his own resignation. The losses may delay the U.S. government's efforts to track numerous backdating scandals, in which companies such as Apple are said to have changed the dates on executive options in order to show a lower buy-in price, inflating their later value. A spokesman for the U.S. attorney's office in northern California noted that investigations into options backdating will continue, despite the two departures. [updated]
"U.S. Attorney Ryan is taking care to ensure a smooth transition in the office's cases," the spokesman said. "There continue to be many assistant US attorneys with strong investigative skills and substantial trial experience on the stock options backdating task force and throughout the office, who are fully capable of carrying on the work of the task force."
The U.S. government is eyeing more than 160 companies for options backdating, and numerous other options backdating cases brought before the Securities & Exchange Commission resulted in one or more members of the company's key management stepping down. Apple investors fear that the same fate could befall Jobs, who is credited with much of the company's success and innovative nature since his return in 1997.
Apple's stock fell after a report from The Recorder revealed that Jobs had hired his own legal counsel, a move that industry analysts said they expected the executive to make much earlier. The stock rebounded however on analyst comments reassuring investors that Jobs' position at Apple is not likely in jeopardy, and that the company's independent report already cleared current management of any wrongdoing.
Despite reassurances, federal prosecutors recently revealed that they are eyeing one backdated stock option grant that carried a false October 2001 date awarded to Jobs. The grant, which finalized in December of 2001 and resulted in a retroactive $20 million charge to Apple's earnings as a result of false dating, totaled 7.5 million options.
Apple's internal investigation resulted in the review of the better part of a million documents related to the shady stock option grants, but the final word will come from federal prosecutors who may choose to utilize the results of Apple's investigation as they probe for further details.
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Lieutenant probably left because boss got better job and brought him along. Boss probably left because Mac-fanboys kept egging his house and felt it wasn't worth the hassle.
And what kind of Washington influence are you talking about? To kick these guys out because they dared go after Apple (like Apple's a saint, all the other companies are the ones who did bad deeds?). Or that they were being pressed by Washington to make an example of Jobs and Co. because the republicans hate Al Gore and they vow to destroy anything he touches.
Oh, I would think it would be bad if the DOJ got involved with any of this. Until the SEC actually concludes any wrong-doing and decides what needs to be done, the DOJ should have nothing to do with it at all.
Finally, this is a BAD development (no matter what you all might think). This is going to cause this whole mess to continue on for several more months/years, keeping a drag on Apple.