Apple likely to restate after options probe
Apple likely to restate after options probe
By Financial Times reporters
Copyright The Financial Times Limited 2006
Published: August 4 2006 07:09 | Last updated: August 4 2006 07:09
Apple Computer said it would probably need to restate its earnings and would delay the filing of its most recent quarterly results, after an internal probe found more evidence of irregularities related to its granting of stock options between 1997 and 2001.
Shares in Apple fell $2.04, or 3 per cent, to $ 67.55 in early New York trading on Friday.
Apple, which had first discovered stock option-related irregularities in June, is among the biggest of more than 60 Silicon Valley-based companies embroiled in a widening stock options backdating scandal.
The company said late on Thursday it would probably need to restate its past financial statements to record non-cash charges for compensation expenses related to past stock option grants.
It said it had not determined the amount of charges it needed to record, the resulting tax and accounting impact, or which periods may require restatement. But in a filing to the Securities and Exchange Commission, it said all earnings issued since September 29 2002 should not be relied upon.
Apple said in June its internal probe had discovered irregularities in some stock option grants made between 1997 and 2001. These included one involving its chief executive Steve Jobs, which was cancelled subsequently and resulted in no financial gain.
The widespread use of options by small, California-based technology companies has in recent months become the focus of enforcement action by the SEC and federal prosecutors.
Several dozen companies have received subpoenas from US authorities who are investigating whether executives manipulated the grant dates of stock options to coincide with low points in the value of their companies’ shares without disclosing their actions to shareholders.
Most cases seem to relate to a roughly six-year period prior to the introduction of Sarbanes-Oxley legislation. Before then option grants were disclosed once a year and could be made in a 45-day window, which has now been cut to two days.
The scandal escalated in July when the US attorney in San Francisco launched an official taskforce together with the Federal Bureau of Investigation to determine whether there was “fraudulent intent to defraud the marketplace, or to hide something from the auditors or the tax man”.
By Financial Times reporters
Copyright The Financial Times Limited 2006
Published: August 4 2006 07:09 | Last updated: August 4 2006 07:09
Apple Computer said it would probably need to restate its earnings and would delay the filing of its most recent quarterly results, after an internal probe found more evidence of irregularities related to its granting of stock options between 1997 and 2001.
Shares in Apple fell $2.04, or 3 per cent, to $ 67.55 in early New York trading on Friday.
Apple, which had first discovered stock option-related irregularities in June, is among the biggest of more than 60 Silicon Valley-based companies embroiled in a widening stock options backdating scandal.
The company said late on Thursday it would probably need to restate its past financial statements to record non-cash charges for compensation expenses related to past stock option grants.
It said it had not determined the amount of charges it needed to record, the resulting tax and accounting impact, or which periods may require restatement. But in a filing to the Securities and Exchange Commission, it said all earnings issued since September 29 2002 should not be relied upon.
Apple said in June its internal probe had discovered irregularities in some stock option grants made between 1997 and 2001. These included one involving its chief executive Steve Jobs, which was cancelled subsequently and resulted in no financial gain.
The widespread use of options by small, California-based technology companies has in recent months become the focus of enforcement action by the SEC and federal prosecutors.
Several dozen companies have received subpoenas from US authorities who are investigating whether executives manipulated the grant dates of stock options to coincide with low points in the value of their companies’ shares without disclosing their actions to shareholders.
Most cases seem to relate to a roughly six-year period prior to the introduction of Sarbanes-Oxley legislation. Before then option grants were disclosed once a year and could be made in a 45-day window, which has now been cut to two days.
The scandal escalated in July when the US attorney in San Francisco launched an official taskforce together with the Federal Bureau of Investigation to determine whether there was “fraudulent intent to defraud the marketplace, or to hide something from the auditors or the tax man”.
posted by Carlos T Mock at 10:18 AM
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