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Case ID: 5130 | Stocks | 07/21/2008
According to a recent news story, plaintiffs filed a class action against Apple, Inc., its CEO, CFO, former general counsel and certain board members for participating in a scheme to file false financial statements, thereby concealing millions of dollars in executive compensation though the backdating of stock option grants.
The report recounts that in June 2006, Apple acknowledged that an internal investigation had revealed irregularities in its stock option grants between 1997 and 2001. It also said that one of the grants in question was to Mr. Jobs but that "it was subsequently canceled and resulted in no financial gain to the CEO." According to the complaint, Apple's share price dropped 14% in the two weeks after Apple's admission, erasing more than $7 billion in share value. It is this loss that the plaintiffs hope to recover. InformationWeek further recalls that in December 2006, Apple said that as a result of its internal investigation, it would restate its financial results to include "an additional non-cash stock-based compensation expense of $84 million after tax [$105 million pretax], including $4 million and $7 million in fiscal years 2006 and 2005, respectively." The company said it had found no irregular grants after Dec. 31, 2002. The report relates that the 105-page complaint asserts that Mr. Jobs and the other Apple executives named in the suit knew what was going on. "The defendants knew that options were not granted on the dates that were disclosed to shareholders and falsified the company's records to create the appearance of illegality, and thus bear direct responsibility for their actions," the complaint states. "Here, Jobs and the Individual Defendants clearly appreciated the fraudulent nature of their conduct." Mr. Jobs, the complaint further states, made an "instant paper profit" of $20,325,000 when, on Dec. 18, 2001, he received 7.5 million Apple shares in a stock option grant dated back to Oct. 19, 2001. And Apple's books did not show a $20,325,000 expense. The complaint also cites a 10-million share option grant in January 2000 that, through backdating, resulted in "instant paper profit" of $83,762,000 for Mr. Jobs, an amount that at the time was not disclosed to shareholders.
At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Stocks Cases of Interest A class action has been filed against Dura Pharmaceuticals, Inc. (formerly Nasdaq: DURA) and certain of its officers and directors by stockholders who purchased the company's common stock between April 15, 1997, and February 24, 1998. A class action lawsuit was filed on behalf of all purchasers of the common stock of ChoicePoint, Inc. (CPS: NYSE).
The complaint charges ChoicePoint and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that defendants, during the Class Period, issued a series of material misrepresentations to the market concerning the Company's financial condition thereby artificially inflating the price of ChoicePoint's common stock.
Unscrupulous venture capitalists can wreck small companies. A class action has been filed against the officers and directors of Internet holding company divine, Inc. (Pink Sheets: DVINQ) by stockholders who acquired the company's common stock in connection of divine’s acquisition of Delano Corporation and eshare Communications in October 2001. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market pursuant to the acquisitions, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages equal to the amount that they invested. Several class actions have been filed against media holding company Belo Corporation (NYSE:BLC) and certain of its officers and directors by stockholders who purchased the company's common stock between May 12, 2003, and August 6, 2004. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. Several class actions have been filed against medical products and services company Cardinal Health, Inc., (NYSE:CAH) and certain of its officers and directors by stockholders who purchased the company's common stock between October 24, 2000, and June 30, 2004. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. According to a press release dated, November 05, 2008, During the Class Period, Sadia entered into undisclosed currency derivative contracts to purportedly hedge against the Company's U.S. dollar exposure. |
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