Apple today revealed that there were "irregularities" in some grants for stock options made in the years 1997 through 2001. The irregularities were reported to the U.S. Securities and Exchange Commission.
One such grant was made, apparently in January 2000, to CEO Steve Jobs. Because the options were canceled in March 2003 without being cashed in, Jobs saw no financial benefit. But financial analysts say that Apple's finances will be closely watched to see if there were any improprieties in Apple's disclosures or any evidence of backdating. Sales of discounted options in years past have been considered legal but sometimes problematic.
Apple hired an independent law firm to investigate the problems and the SEC will likely launch an inquiry as well.
Dozens of corporations, including Microsoft, Intuit, and Computer Associates, have announced that they are reviewing their option practices, which have come under increased scrutiny since enactment of the Sarbanes-Oxley corporate accountability law in 2002.
From The Financial Times:
Apple did not detail the "irregularities" and said executives would refrain from commenting until the investigation was concluded. "Apple is a quality company and we are proactively and transparently disclosing what we have discovered to the SEC," said Mr Jobs. "We are focused on resolving these issues as quickly as possible."
