CEO Jobs Meeting With Feds: "Scandal" Start Or End?
Senior Editor, CNBC
The meeting Apple's CEO Steve Jobs had last week with SEC and U.S. Justice Department officials over stock backdating--might not turn out to be much at all--according to CNBC's Jim Goldman. The meeting was reported today by Bloomberg. But Goldman says people he talked to --don't expect anything to come from all this. In fact--it seems even the probe by government officials may just end up "going away."
Two weeks ago Jobs confirmed that Apple handed over papers relating to the backdating to the government. It was last week that he apparently met with officials of the SEC and Justice Department in San Francisco. Nothing specific's been released about what Jobs said or was aksed in the meeting--for if any others will take place.
The meeting was about the 6,500 grants and stock options given to Apple workers and apparently backdated between 1997 and 2003. Jobs was given one grant that was approved by a board meeting the seems never to have taken place. The internal probe by Apple itself clears Jobs of any wrong doing but confirms he had some say in backdating some of the options--but not his own. Apple says that shows he didn't profit from the backdating.
Goldman reports that Apple's statement about all this-- said "current management" did nothing wrong--but more or less implies that former CFO Fred Anderson and former general counsel Nancy Heinen might be involved. Representatives for both deny the two had anything to do with the backdating. Heinen left Apple in May of 2006 while Anderson left in June of 2004.
Goldman says the key issue for investigators is the false "board meeting" minutes that were forged. Who wrote them and who ordered them?
Goldman says people he talked to--like Gene Munster of Piper Jaffray--say the don't think this will hurt Apple or Jobs. Munster says he believe Jobs was aware of the backdaing but did nothing illegal. And Goldman says the "probe" itself could take a few months to work itself out--and that most observers expect this just to fade away--without even some sort of formal announcement to end the thing. The current U.S. Attorney in the probe--Kevin Ryan-- is being replaced and Goldman says that could have some impact on the case.
Apple stocks had been trading down earlier today.
FYI: Stock options allow shareholders to buy shares at a later date--more than likely at the market price the day they were granted. Backdating puts stocks to days when low prices inflates their value. AND if not disclosed, backdating more than likely is illegal because it hides costs from shareholders and regulators.