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Stock option back-dating. A crime?

Prosecute executives for stock option back-dating and other accounting tricks?

  • Hell yes!

    Votes: 13 68.4%

  • Yes, in many cases.

    Votes: 3 15.8%

  • I don't think so.

    Votes: 2 10.5%

  • Hell No!

    Votes: 1 5.3%
  • Total voters
    19
Climber

Climber

Well-known member
Joined
Jul 13, 2004
Location
Clovis/Fresno
Moto(s)
01 Goldwing GL1800
Name
Brett
Apple computer gives itself a clean bill of health
Should Executives be prosecuted for these types of things?

I always find it hypocritical when white collar crimes happen, people say it's just business even though 10's (or 100s) of million dollars are involved. But when somebody steals $100 they can go to jail.

My personal viewpoint is that in every one of these cases, they should be prosecuted and people should go to jail. Stealing is stealing whether you do it with a pen (or keyboard) or whether you take it by hand.
 
See what contributing to a politician who later gets on your board of directors buys you?

Welcome to business as usual in politics. :rolleyes
 
If you are ok with having thousands of people getting their lifetime savings ripped out from underneath them and being left with nothing, you should have no problem with what Jobs did. Seven million backdated shares is a pretty big number iff you ask me. The stock price in mid 2001 was 11 bucks a share.

Typically an option price is set a little higher than the current stock value, so let's guess the option was set at 15 or 20 bucks a share. The current price is almost 90 a share. That adds up to about half a billion dollars the guy was trying to suck out of the company.

The guy should probably be put in jail.
 
Climber said:
My personal viewpoint is that in every one of these cases, they should be prosecuted and people should go to jail. Stealing is stealing whether you do it with a pen (or keyboard) or whether you take it by hand.
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Absolutely, and I have a very hard time believing that anyone involved wasn't fully aware that what they were doing was right there teetering over the edge of breaking the law. White collar crime at that level can ruin people's (employees, small investors) lives. It verges on murder, when something like Enron happens and wipes out the life savings of investors.

Why not just do a Disney and say, "Hey, here we go, let's give this guy $97 million dollars" so that at least it's out in the open?
 
If I hack into the HR computer system and change my pay scale by $30,000 a year I would go to jail. It's stealing from the stockholders of the company.

If the board of directors goes behind the shareholder's backs authorizes payments to itself and executives of millions of dollars and then doctors the books to hide it, how is that any different?

A life sentence in prison would be to good for these people.
 
According to the article cited, back-dating options may not be illegal in every case.

Backdating options involves picking dates for awards when shares were trading at a lower price to boost the potential windfall to recipients. That isn't necessarily illegal, but companies must disclose and account for the practice. Many [companies] failed to do so.
Click to expand...

If someone breaks the law, they should be prosecuted. If someone does something that is not illegal, they should not be prosecuted.

I don't own any Apple stock so either way I won't lose any sleep over this one :teeth
 
notfromcali said:
Typically an option price is set a little higher than the current stock value,
Click to expand...

Typically, the option is priced at the price it closes at on the day it's granted.
 
I personally DO own stock in Apple, and am not very concerned about it at all. In fact, I'm pleased with recent events.

I bought more last Wednesday when the stock dipped after revelations of Jobs hiring an attorney. I was pretty sure it was all a tempest in a teapot and sure enough it rebounded. That purchase is up 8%.

It was like 70 million over four years in restated earnings. Pfff! Chump change.
 
It's not the effect to the stock holders that I'm concerned about, it the growing double standard in law enforcement that bothers me.

The (very) clear message that cases like this show is that if you're going to steal, then steal BIG because you are very likely to get away with it if you steal big enough!
 
In my profession it would be called "falsification" and it would be prosecuted by the Federal Dept of Justice.

Conviction would result in 20K fine, possible prison time, and permanently barred from the industry

Yeah, the United States of America is all about equality
 
CrashJunkie said:
As the article says, it's only a crime if it's not properly disclosed and accounted for.
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From the article:

In its regulatory filings Friday, Apple disclosed that a 2001 award of 7.5 million options to Jobs was recorded as having been approved at a special board meeting that never actually took place. The company also acknowledged that documents connected with the grant were falsified to make it look like the required board approval had occurred.

What Apple is doing is blaming the whole thing on a couple of underlings, one of which didn't even work for Apple when the investingation started, so as to save Jobs' job.
 
Poxy said:
It was like 70 million over four years in restated earnings. Pfff! Chump change.
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Oh yes, that makes it ok, since it was only $70 million of investors money that was stolen. :rolleyes

What would your opinion be if this was an oil company committing this crime? :laughing
 
brichter said:
Oh yes, that makes it ok, since it was only $70 million of investors money that was stolen. :rolleyes

What would your opinion be if this was an oil company committing this crime? :laughing
Click to expand...

I'm not saying it's right or wrong, just that as an investor I'm not unhappy.

I also have securities in Petroleum companies. If the share price is unaffected, then I really don't care.
 
That, however, is not the subject of the thread. :teeth

<edit>
I own petroleum stocks and Apple stock also. I believe what Apple/Jobs did was a crime, and should be punished as such. But, with Al Gore heading up the investigation, I expected nothing less.

We'll have to wait and see if the Feds come to a different conclusion.
 
Last edited:
brichter said:
That, however, is not the subject of the thread. :teeth

<edit>
I own petroleum stocks and Apple stock also. I believe what Apple/Jobs did was a crime, and should be punished as such. But, with Al Gore heading up the investigation, I expected nothing less.

We'll have to wait and see if the Feds come to a different conclusion.
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Well, someone earlier asked about how stockholders felt, that's all.
 
Really? I must have missed that.

<edit> Nope, I didn't miss it, nobody asked how the stockholders felt.
 
Travis said:
I don't own any Apple stock so either way I won't lose any sleep over this one :teeth
Click to expand...

I guess I was responding to this. So file a class action suit against me!
:p
 
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