Steve Jobs unlikely to face criminal charges over options scandal
Apple haters laughed with glee when geek pinup boy Steve Jobs was implicated in a stock-options scandal last year. Now, it seems their glee will be short lived as leading investigative journalists have revealed that there is little evidence to support criminal charges against him.
In June 2006 an internal investigation by a Special Committee at Apple revealed that there were irregularities relating “to the issuance of certain stock option grants made between 1997 and 2001″. Basically what happened was that stock options were granted with dates preceding the approval date of those grants.
The Special Committee found that “in a few instances, Apple CEO Steve Jobs was aware that favorable grant dates had been selected, but he did not receive or otherwise benefit from these grants and was unaware of the accounting implications”.
A criminal investigation into the scandal is currently being conducted by the Securities and Exchange Commission and the San Francisco US Attorney General’s office. The investigation is said to be looking at a massive issue of 7.5 million options to Steve Jobs on 18 December 2001, which were backdated to 19 October 2001. The back dating of the options increased their value by $20 million had Jobs exercised them.
A review of the 2001 stock options issue by Howard Mintz and Troy Wolverton at the Mercury News reveals that there is little evidence to support a criminal case against Steve Jobs.
“Despite Apple’s disclosure that Jobs approved widespread backdating at Apple, there is no evidence he directed the backdating of his own grant or covered it up afterward, based on a review of regulatory filings and interviews with lawyers intimately familiar with the grant who asked not to be identified,” wrote Mintz and Wolverton.
“Without such proof, federal prosecutors cannot show the type of egregious misconduct they’ve targeted in the blossoming options scandal.”
Mintz and Wolverton say that if Jobs avoids criminal charges for the 2001 grant, he’ll more than likely avoid all criminal charges over the share options scandal.
According to Mintz and Wolverton, the backdating of the Jobs stock options arose out of Apple’s board trying, in good faith, to reward Jobs for turning Apple around. They also said that a decision not to indict Jobs would come as big a big relief to Apple and its shareholders:
“His loss would be a body blow to the company. Jobs is not only Apple’s chief spokesman and evangelist, he is Apple, playing a key role in decisions big and small.”
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April 24th, 2007
This is hardly new news: “Despite Apple’s disclosure that Jobs approved widespread backdating at Apple, there is no evidence he directed the backdating of his own grant or covered it up afterward, based on a review of regulatory filings and interviews with lawyers intimately familiar with the grant who asked not to be identified,” wrote Mintz and Wolverton.
The information in the public record, added to the no-name opinions of lawyers working for AAPL (?) does not add up to your headline. I still think that Job’s must step down as a result of his errors and omissions.