NYT Reports Steve Jobs' Exoneration

heyitsgogi writes "The New York Times is reporting that Apple has cleared Steve Jobs of any wrongdoing. From the article: 'In a filing with the Securities and Exchange Commission, Apple said that while its investigation revealed that the company's stock option procedures did not include sufficient safeguards to prevent manipulation, Mr. Jobs did not benefit financially from any questionable stock awards.' As a result of the internal investigation, Apple said it would record $84 million in expenses related to the options awards."

In other news...

[I'm just joshin (633449)]

Rosie ODonnell says she's not fat. Geek says that the 10 gadgets hanging out of every pocket makes him look sexy. Linus says that Linux is the best OS ever. Ballmer says the chair threw itself. Pot denys that the kettle is black.

Re:In other news...

[CaymanIslandCarpedie (868408)]

...and HP's internal audit shows spying on its board by the chair woman was all done legally.

Re:In other news...

[udderly (890305)]

A North Korean Blue Ribbon Commission says that Kim Jong Il isn't a dictator and is beloved by his people.

Nice to see.

[sgt.greywar (1039430)]

Apple is no Enron. Sometimes they really didn't do it.

Re:

[no reason to be here (218628)]

True, but Enron was so much more than messing with stock options. it was a financial shell game, shifting the company's debt from one dummy corporation to the next in order to create the illusion of profitability.

Let's get this straight.

[argent (18001)]

OK, let's get this straight.

Apple does an internal investigation, finds a problem, reports itself, and you're comparing this with Enron [lehenbauer.com] because they also say Steve Jobs didn't benefit from it?

I guess someone's activated an even more powerful reality distortion field than Steve's.

Re:

[Omestes (471991)]

Okay... he was implicated by an in house audit, AND reported it. Later (after reporting it) it they find that he is innocent. If this was corporate wrong doing, then why would they report it in the first place, AND THEN do responsible action and admit a mistake, and try to fix it?

Yes, corporations can do evil things, and DO evil things. But that does not make everything evil, mistakes still happen, misdirected allegations still happen, just like in real life. Corporations are not intrinsically bad, and

In related news

[dmuth (14143)]

An internal investigation by Microsoft has cleared Steve Ballmer of throwing any chairs.

Whew....

[Keebler71 (520908)]

What a relief... Apple has made a press release that an internal Apple investigation found no wrongdoing by its CEO. I am sure that is worth a lot to the SEC and is in no way damage control against the investor jitters since it was leaked that the SEC was investigating...

Re:

[afidel (530433)]

Dude, you've obviously never dealt with Internal Audit folks before! If they had an internal audit and never reported that would be one thing, but unless something is seriously wrong with a company I tend to trust internal auditors, they are brutal. If you have anything to do with SOX or HIPPA you know what I mean.

Apple with no Jobs?

[CDPatten (907182)]

Apple may have cleared him. but the SEC hasn't. I suspect Apple is only clearing him because of the speculation, rumors, and falling stock.

The internet is buzzing [marketwatch.com] withspeculation that Steve Jobs may step down over reports that he profited $7.5 million in stock options by falsifying an executive board meeting. The financial times has a good overview of the unfolding story [ft.com].

From the Article:

"Steve Jobs, chief executive of Apple Computer, was handed 7.5m stock options in 2001 without the required autho

Re:

[drinkypoo (153816)]

The article still doesn't indicate any wrongdoing on the part of Jobs. It does suggest that apple fucked up someplace. It also kind of suggests that Jobs was involved, since he was the recipient of the options... But it doesn't say so.

Re:Apple with no Jobs?

[One Louder (595430)]

...he profited $7.5 million in stock options...

How exactly did he profit from these options when he gave them back without exercising them?

Astroturf Much?

[Cadallin (863437)]

Falling stock? WTF? The only places I've seen people making a big deal out of this are posts by users on Tech sites. Meanwhile Apple stock is up nearly $4.00 today alone, and is riding at 10+ year high of over $84/share. Methinks there's some pretty heavy astroturfing going on about this. Because the facts seem to indicate that the shareholders and market in general don't give a flying fuck about this "huge" scandal. They're too busy watching Apple's continually rising sales and high profit margins to care about something as piss-insignificant as a $100 million in stock irregularities.

I mean, god damn people, this isn't ENRON or WorldCOM. Apple sure as hell isn't collapsing like a house of cards. The facts remain: Apple is making shit tonnes of money. Worst Case Scenario out of this event: Apple gets a bit of bad press nobody cares about, they pay a fairly minor fine (compared to their Billions in Cash and liquid assets) of a few hundred million plus maybe some back taxes, and maybe, MAYBE a CFO and some other financial staff get forced into early retirement. That's it. You think the board of directors (let alone the Shareholders(!)) are going to cashier Steve "Reality Distortion Field" Jobs over 10 or so million? HA! Get a fucking life!

Re:

[MMC Monster (602931)]

Frankly, I think the board of Apple will decide it's cheaper to have everyone at the SEC involved in the investigation assassinated than allow Jobs to step down.

Re:

[Cadallin (863437)]

You mean he secured counsel when he became the subject of an investigation, instead of ignoring it or defending himself like an idiot? He must be guilty! I'm unimpressed, and I'll stay that way until somebody files charges.

Re:

[yabos (719499)]

And if you were charged/accused of something bad you wouldn't get a lawyer even if you were innocent?

Re:

[rubycodez (864176)]

a stock option is worth $0 if not exercised, I have some from the dot-com era that aren't even good for wiping my ass (difference between apple's and mine is if exercised mine would have negative value).

Re:Apple with no Jobs?

[wass (72082)]

You wrote:
The internet is buzzing withspeculation that Steve Jobs may step down over reports that he profited $7.5 million in stock options by falsifying an executive board meeting. The financial times has a good overview of the unfolding story.

Yet quoting from the Financial Times article you linked to

Mr Jobs later surrendered his options before they were exercised, implying that he did not gain any direct benefit from them. He was later given a grant of restricted stock by the company instead.

So where is all this internet buzz describing how Jobs 'profited' from $7.5 million in stock options that he surrendered without exercising? You might want to RTFA [nytimes.com] which has many more specifics than your links.

You further claim that Apple 'cleared him' due to speculation, rumors, and falling stock. But please explain how Apple can formally and legally exonerate Jobs without demonstrating exhaustive proof within SEC accounting rules that Jobs wasn't involved. Ie, they handed all results of their internal inquiry directly to the SEC, and if they falsified anything in there they'd be in far more trouble than they are now. And their internal investigation was quite exhaustive, with over 26,000 man hours [streetinsider.com] devoted to this issue.

Also, you'll notice in that NYT article that the focus of the blame seems to lie on two executives (Fred Anderson and Nancy Heinen) that have both subsequently quit Apple since this backdating scam and also have their own independent lawyers ready. And FWIW, I can't find the story now, but an analyst at Piper Jaffray claimed a less than 5% chance Jobs was illegally involved but that as CEO it's standard practice to retain one's own legal counsel for such a situation.

Re:

[aristotle-dude (626586)]

Yes he was handed stock and he handed it back long before the initial story about the start of the internal investigation. You speak of the SEC but they have not been involved as of yet nor did they initiate this investigation. Nobody has been charged with anything and the SEC has not accused Apple of anything so far. All we have is a bunch of spin from the media. Had Apple not taken the initiative to investigate this matter, we would probably not be aware of this issue at this moment.

Re:

[Reaperducer (871695)]

All we have is a bunch of spin from the media.

At least if it was media spin, there might be something there that we'll find out later.

All we REALLY have is spin from Microsoft apologists, jealous blogger pseudo-journalists, and people hoping to short the stock.

Re:

[falcon5768 (629591)]

The only thing insightful in this comment is how stupid the person making it is. Never mind the fact that Jobs gained nothing from the stocks since you cant profit from stocks you turned in, but for all purposes a internal investigation IS like the SEC going after them. All of the data gained from a internal audit is turned over to them and there are extremely strict rules for reporting these audits, meaning that if they couldnt find anything, then nothing the SEC could do would likely turn up anything eith

Whole Lotta Fakin' Goin' On Over Jobs' Options

[theodp (442580)]

Check out the documents Apple filed with the SEC Friday [sec.gov] acknowledging that a grant of 7.5M options to CEO Steve Jobs with an exercise price of $18.30 dated 10-19-2001 was actually finalized on 12-18-2001 when the share price was $21.01. Apple goes on to note that approval for the grant was 'improperly recorded' as occurring at a special Board meeting on 10-19-2001 - a special Board meeting that Apple now admits did not occur. Apple takes a page out of Mark Hurd's I-know-nothing-playbook [siliconvalley.com], insisting that 'There was no evidence, however, that any current member of management was aware of this irregularity.' Which begs the question: Don't any members of Apple management read those Proxy Statements they provide to investors and the SEC? In 2002 [sec.gov] and 2003 [sec.gov], Apple's Proxy Statements clearly stated that: 'in October 2001 the Compensation Committee recommended and the Board approved granting Mr. Jobs options to purchase 7,500,000 shares under the 1998 Plan in order to provide him with an incentive to continue to serve as the Company's CEO and maximize shareholder value.' Apple also points out in its SEC filing that Jobs did not receive or financially benefit from backdated options, apparently feeling that the 5M shares of restricted stock Jobs was given after 'voluntarily canceling' his underwater options grants in 2003 [cnn.com] shouldn't count.

Re:

[donutello (88309)]

It's worse than that. Here's what Morningstar had to say about this:

We have historically not agreed with Apple's "no harm, no foul" treatment of its shareholders when it comes to option issuance, pricing, and follow-on dilution. We are especially cautious about the spin that this CEO grant was simply canceled. A careful read of the situation reveals two CEO grants under review, representing 17.5 millions options with strikes in the $18-$30-plus range, were nearly worthless in March 2003 when they were cance

Re:

[mkiwi (585287)]

[sarcasm] Yes, and we all know that Steve needs those stock options to stay afloat with his $1 salary. [/sarcasm]

Jobs is a billionaire, what motive coud he possibly have for getting that money. He is the largest share-holder in Disney, he could easily sell some of that stock and make a LOT of money.

I don't see any possible motive for Jobs to do this other than to see just how well the Reality Distortion Field(tm) works.

Re:

[SETIGuy (33768)]

I don't see any possible motive for Jobs to do this other than to see just how well the Reality Distortion Field(tm) works.

I don't think you understand how the billionaire mind works. They don't think of much of motivation when dealing with such trivial amounts of money. When you find a quarter in the vending machine change slot, how much effort do you exert to find the proper owner. What were your motivations in putting it in your pocket?

I'm sure Steve feels the same way. He had a bunch of worthl

So if Apple says that the execs aren't guilty.....

[8127972 (73495)]

..... then that's cool right? Perhaps. But am I the only one who has a bit of an issue with no third party (and by that I mean COMPLETELY outside Apple) oversight? It's not as if they don't have an interest in this right?

Re:So if Apple says that the execs aren't guilty..

[wass (72082)]

But am I the only one who has a bit of an issue with no third party (and by that I mean COMPLETELY outside Apple) oversight?

You mean like the SEC [sec.gov], to whom Apple directly gave the results and all details of their formal investigation to? And to whom they're legally obligated when carrying out said investigation, under penalties of perjury?

Now of course just because Apple finds these conclusions on its own investigation which is 'on the record', doesn't mean they're inherently innocent, the SEC will give th

In related news,

[idontgno (624372)]

The US Securities and Exchange Commission and Department of Justice have independently terminated investigations into Apple's reportedly irregular stock option grant activities. A DoJ spokesperson was quoted as saying "A superior jurisdiction has cleared Apple and Steve Jobs of all allegations, so we obviously have no grounds to pursue."

Apple has cleared... Apple said...

[EnsilZah (575600)]

I know that the law views corporations as legal persons, but isn't this taking it a bit too far?

In other words, corporate circle-jerking is OK...

[xxxJonBoyxxx (565205)]

Apple said that while its investigation revealed that the company's stock option procedures did not include sufficient safeguards to prevent manipulation, Mr. Jobs did not benefit financially from any questionable stock awards.

If this stands, its shitty news for anyone who holds stock. What this would essentially do is legalize corporate circle-jerking. In other words, it would be OK for top buddies to make deals that individually don't directly financially benefit the decision-maker, but such deals would

Quote

[Reality Master 101 (179095)]

Steve Jobs was quoted today as saying, "I am proud to say that I have been exonerated by myself twice as fast as any previous corruption probe."

That Steve! Always the innovator, even when it comes to stealing from the shareholder. I'm feeling a strange sensation right now -- I think it's from the corruption-distortion field.

Did anyone else read this as...

[CrazyTalk (662055)]

Did anyone else read this as Steve Jobs Execution? Guess I've been looking at too many Sadam Hussein stories online today...

Where did the 84 million USD come from?

[@madeus (24818)]

The article says "As a result of the internal investigation, Apple said it would record $84 million in expenses related to the options awards.".

Is this from expenses incurred as a result of the investigation or are these expenses that were not recorded previously, but should have been?

Analysis of the forum...

[7Prime (871679)]

Now, I can not attest to knowing anything about this ordeal, but it has been interesting to follow how the forum is handling it. I've noted that most of the posts on this forum largely fall into two catagories: flippint remarks, usually involving common cliches and tidbits from geek pop culture thrown in for good measure; and then fairly serious posts by people who actually READ THE ARTICLE, most of which exhonerate Mr. Jobs. Now, I expected quite a few posts that would attempt to clear him and settle the unrest it has caused... but I expected more in opposition by people who actually have something worthwhile to say.

Re:...what the!?

[jellomizer (103300)]

Well it is not that Jobs is irreplaceable but Jobs is heart of the company. The reason for Apples success lately was because the systems follows Jobs vision of a computer. Microsoft and Dell tend to compromise what all their customers say they want and put it in. Apple just put in what Jobs like. Hence being able to Switch OS's and Platforms without missing a beat. Democracy doesn't always come up with the best solution just one that everyone can deal with. Apple either you love it or you hate it. Apple does listen to your advice but just because a lot of people want that feature it doesn't mean they will put it in.

Re:

[Penguinisto (415985)]

I don't disagree at all that a person (or group of people, e.g. Mssrs Hewlett and Packard) can be the source of vision and be the very heart of a company. My assertion is that somehow the writer thinks that Apple would collapse into some sort of corporate supermassive black hole 5 minutes after Jobs cleaned out his desk and left the offices at Cupertino.

Seriously - Intel didn't implode when Andy Grove left. GE seems to be holding up okay minus Jack Welch... and both of them were HUGE driving forces in whe

Re:

[pestilence669 (823950)]

Getting rid of incompetent management is harder than it sounds. That takes skill & balls. I've read a lot about Jobs' management style. Most CEOs don't seem to be as hands on. He seems to have a no compromise "my way or the highway" approach. I think his value is in his micromanagement.

Re:...what the!?

[MBCook (132727)]

Really?

Steve Jobs pulled the company back from extinction. During his reign we've seen the rise of OS X, the iMac phenomenon, the iPod juggernaut, iTunes, and other great software. The fact is the design and implementation of nearly all of Apple's products (especially the big ones) owe at least something to Jobs tweaking. Don't forget his massive performances every Macworld (less than 2 weeks, yea!).

The loss of Steve Jobs would be devastating to the company's stock, if not the company it's self.

In fact, not too long after they announced Steve Job's cancer and successful surgery last year there was an opinion piece in Forbes that made a very strong case that they were wrong not to tell the stockholders about it until after it was fixed because he was such an important part of the company that his health really mattered, compared to the financial results if the CEO of Bank of America got cancer. BoA has other capable people and could survive.

True or false, Apple is basically perceived by a great many people to be an extension of Steve of sorts. Without him there, it's not the same Apple.

Re:

[locokamil (850008)]

Judging by the amount of chaos, unhappiness and general unpleasantness in the world, I submit that Hell is actually pretty efficient...

Re:

[RyuuzakiTetsuya (195424)]

It's not that Steve Jobs is god, it's just that us mac folk are pretty afraid of what products the company will poo out if he leaves again.

Re:

[by Anonymous Coward]

The so-called reality distortion field is really just demanding perfection. In business, especially large ones, people slack because they know everybody else is slacking. Jobs' reputation of coming down to the smallest employee and either firing them or berating them for not producing perfection means that everybody feels everybody else is doing their part. The key ingredient is that despite this people like Jobs and want the team to succeed. Only a genius leader can do that, and that's why he's so valu

Re:

[Reverberant (303566)]

Jobs is not poor, yet he does very little as a philanthropist short of giving Apple computer discounts to schools to get more market share.

We've been through this before... Jobs may not have made any public announcements about his philanthropy, but that doesn't mean that he's not donating time and/or money to worthy causes. In other words, the only people who know how much (or how little) Jobs gives away is Jobs himself and his accountant.

I'm not trying to excuse any lack of philanthropy - if Jobs is

philanthropy

[falconwolf (725481)]

The sad part is so many people put him above reproach and the good guy in contrast to Gates in the great computer wars. Yet in comparing personal lives, Gates gives away more money than Jobs makes, and Jobs is not poor, yet he does very little as a philanthropist short of giving Apple computer discounts to schools to get more market share.

I guess you haven't heard how Jobs has worked with Bono and is working on AIDS amoung other things. Yea you could talk about how Gates gives away more than Jobs makes

Re:

[Cyno (85911)]

Yeah, did all that LSD I took put me in some alternate universe where wrong is alright?

Re:

[Niten (201835)]

Well hey, at least it isn't Fox "Mark Foley is a Democrat" News. Anyway, why would you have any reason to doubt the veracity of this report?

I'm not sure what this means

[Infonaut (96956)]

If the New York Times says it, then it must be true -- NOT!

Are you saying that the NYT is incorrect, and Apple's own internal investigation did not clear Jobs? Or are you saying that somehow the NYT is biased in favor of Apple, and made up the entire story? Or are you actually talking about something completely unrelated to Apple, Steve Jobs, and the story at hand?

We all know that just because Apple cleared Jobs that doesn't mean there wasn't some wrongdoing on his part, but the NYT is merely reportin

Re:

[Reaperducer (871695)]

If it wasn't for the New York Times, half of the world's blogs would be empty.

On second thought, maybe that's not such a bad thing.

Re:

[bagsc (254194)]

Yes. But this keeps him from being charged for fraud. "Three elements are required to prove fraud: a material false statement made with an intent to deceive (scienter), a victim's reliance on the statement and damages." Clearly, the first two occurred. If this were done last year, Jobs would already be packing up his office, because of the increased burden of proof thanks to SOX [wikipedia.org]. The question then is if the financial statements issued back then violated the accounting standards of the day.

Of course, cr

Re:

[aristotle-dude (626586)]

Of course, creative lawyers will bring civil lawsuits on behalf of shareholders saying that there was damages in some other method.

So in otherwords, lawyers will find a way to steal money from shareholders?