Apple: No Misconduct By Current Mgmt., CEO Steve Jobs Apologizes

October 3rd, 2006 at 3:00 PM - Apple Stock Watch by Brad Cook

Apple on Wednesday announced the findings of the committee looking into its stock option practices, finding no misconduct by any members of the current management team but noting "serious concerns regarding the actions of two former officers in connection with the accounting, recording and reporting of stock option grants." Former CFO Fred Anderson has resigned from the board of directors, stating that he believed such acton was "in Appleis best interests."

Mr. Jobs stated in a press release: "I apologize to Appleis shareholders and employees for these problems, which happened on my watch. They are completely out of character for Apple. We will now work to resolve the remaining issues as quickly as possible and to put the proper remedial measures in place to ensure that this never happens again."

Appleis CEO was previously mentioned as part of the probe, but the company said: "In a few instances, Apple CEO Steve Jobs was aware that favorable grant dates had been selected, but he did not receive or otherwise benefit from these grants and was unaware of the accounting implications." In total, stock option grants on 15 dates between 1997 and 2002 appear to have been backdated to be beneficial to the recipient, according to the company.

Apple will now make the Securities and Exchange Commission (SEC) aware of its findings. It still expects to have to restate previous financial statements, but it is still not sure which fiscal periods will require restatement and how that will impact past earnings. The company added that it "continues to proactively inform the SEC of its findings."