Ah yes, Shaw Wu does "proprietary analysis" (a procedure involving his left hand up to his writs and a hole a few inches below his lower back) and concludes that Jobs can't be liable because it wasn't his fault. Has Mr. Wu heard of Sarbanes Oxley? Basically, tomorrow, SarbOx will ensure that Jobs signs his own death warrant. As CEO, he has to personally sign the financial restatement.

Let's say you sold AAPL at a split-adjusted $7 - $10 in 2002. For the previous 2 years, it was basically an underperforming turkey. Do you think you might be looking at a shareholder lawsuit in light of financial shenanegans involving the iCEO? Maybe.

It is ironic beyond belief that Munster and Wu fire off excuse after excuse. They want people to buy AAPL. But this options stuff is about Apple execs screwing the shareholders. I am inclined to believe that Jobs is probably innocent in fact, but perhaps not so innocent in the eyes of the law. Remember, at the time, he is still diddling around as part time CEO. You can't just babysit a band of thieves in the afternoons!

Sarbanes-Oxley doesn't apply if the option grants happened prior to S-O's enactment. The law is not retroactive to acts by officers and directors prior to its enactment.

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Engine Joe wrote:
Sarbanes-Oxley doesn't apply if the option grants happened prior to S-O's enactment. The law is not retroactive to acts by officers and directors prior to its enactment.

This is subtle. Pay careful attention. It applies to tomorrow's restatement, which is as much a financial document about now, considering the involvement of a popular CEO. If it's incomplete or inaccurate and that comes out later, Jobs is hosed. I doubt that possibility. However, if it's complete, Jobs will basically be signing his own death warrant. When you don't expense options, you're diluting the shareholders. When you add backdating into the mix, it's screwing shareholders badly. Perhaps DOJ and the SEC look the other way, but institutional investors ought to be applying tremendous pressure over this.

My bet is that the FT piece reflects 30% - 70% of the bad news that will be in tomorrow's report. The FT piece will probably turn out to be pretty accurate but not the whole story. That news was likely leaked to "brace" the markets. Think here... we don't know if the mythical iPhone will be a flip phone or a slider or even exist at all, and yet we know about 7.5 million options.

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Bosco wrote:
This is subtle. Pay careful attention. It applies to tomorrow's restatement, which is as much a financial document about now, considering the involvement of a popular CEO. If it's incomplete or inaccurate and that comes out later, Jobs is hosed. I doubt that possibility. However, if it's complete, Jobs will basically be signing his own death warrant. When you don't expense options, you're diluting the shareholders. When you add backdating into the mix, it's screwing shareholders badly. Perhaps DOJ and the SEC look the other way, but institutional investors ought to be applying tremendous pressure over this.

I'm not an attorney specializing in corporate finances. How will Jobs be "signing his own death warrant" if the restatement is accurate? Do you think that the Apple board of directors would replace him? (If they tried, the stockholders would likely vote the entire board out.)

I can't speak for institutional investors--perhaps you can. One of the few things I've learned about the stock market is that predictions are usually pretty useless. The only thing LESS useless is after-the-fact analysis, especially applied to the market as a whole--the stuff I used to hear on Wall Street Week, that the "market was down because investors were concerned about ..." Of course, the same nitwits had said before that the market went UP for the same reason. It's rather like Freudian psychology: it purports to explain everything but cannot predict anything.

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gslusher wrote:
I'm not an attorney specializing in corporate finances. How will Jobs be "signing his own death warrant" if the restatement is accurate? Do you think that the Apple board of directors would replace him? (If they tried, the stockholders would likely vote the entire board out.)

Expect nasty shareholder lawsuits. For all the people that bought AAPL stock in 2002 and have ridden the wave since, there are people who sold AAPL in 2002, when it had several years of underperforming. Meanwhile the execs were diluting the value of the company to enrich themselves.

The more I think about it today, the more I think that Jobs will probably just lose interest if things get too thick. Remember way back when he really didn't want to be CEO anyway. Things have already gotten too thick... we're no longer discussing the mythical iPhone that won't materialize.

The institutional investors think Jobs is the best thing since sliced bread. Under his leadership, Apple has been a volcano spewing money into their pockets, dilution and all. And think about this: the executives at the investment houses also get some of their compensation in options! Steve Jobs is their beloved brother.

As for individual investors, the vast majority of them have also made a ton of money off Apple under Jobs. Yeah, someone will put together a pissy little nuisance suit, and Apple will settle it for peanuts. Happens every year.