Jobs, Apple directors face new stock-options lawsuit
Published: 03 Jul 2008 09:41 BST
Current and former members of Apple, including chief executive Steve Jobs and several directors, are being sued again over their role in the company's stock-options backdating affair.
The latest case, filed in a federal court in San Jose, California, last Friday, was put on record on Monday. Martin Vogel and Kenneth Mahoney, the plaintiffs, are charging several executives and directors of Apple with securities fraud for failing to disclose the company's practice of backdating certain stock-option grants in the early part of this decade.
Apple has admitted that the company backdated certain option grants, including two awarded to Jobs, in order to take advantage of more favourable exercise prices for those grants. This practice isn't illegal, so long as it's disclosed, but dozens of companies failed to do so in the early part of this decade, and some people have been jailed as a result.
Federal and state authorities have thus far declined to prosecute Jobs, or any current Apple members, after an internal investigation cleared the chief executive, but the US Securities and Exchange Commission has filed a lawsuit against Nancy Heinen, Apple's former general counsel, for allegedly covering up the backdating.
This isn't the first shareholder suit to be filed. A similar suit has faced challenges getting off the ground because it is very difficult for shareholders to prove that they were harmed by this practice.
According to InformationWeek, Vogel and Mahoney claim $7bn (£3.5bn) worth of shareholder value was chopped from Apple's stock in the two weeks following the June 2006 disclosure that the company had discovered backdating in its past.
The problem for Vogel and Mahoney, however, is that Apple's stock has essentially tripled since then, as the company has continued to sell large volumes of Macs, iPods, and, more recently, iPhones.
Credit: Jobs, Apple directors face new backdating suit from CNET News.com
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