Judge Dismisses Shareholder Backdating Case Against Apple
by , 9:25 AM EST, November 15th, 2007
U.S. District Court Judge Jeremy Fogel dismissed a shareholder suit against Apple on Wednesday over improperly backdated stock option grants. The case was filed by the New York City Employees' Retirement System and alleged that the improperly backdated grants diluted the company's stock by more than 200 million shares, according to Bloomberg.
The suit was filed after Apple revealed that several stock option grants between 1997 and 2002 had been improperly backdated. The Cupertino based company hired a company to perform an independent investigation into the incidents, and ultimately cleared CEO Steve Jobs of any wrong doing.
Without naming any names, the investigation also loosely pointed the finger at two Apple employees that most assume were former General Counsel Nancy Heinen, and former CFO Fred Anderson. Ms. Heinen is being sued by the SEC over her alleged involvement, and Mr. Anderson settled with the U.S. government agency out of court without admitting any wrong doing.
The New York City Employees' Retirement System suit claimed that had Apple properly disclosed and accounted for the shares, the company's stock would not have been diluted. Judge Fogel, however, didn't agree.
His opinion stated "While the subsequent disclosure that the options were backdated might require a restatement, without a discernible drop in the stock price there is no basis upon which to establish an injury to shareholders."
Judge Fogel also stated that the plaintiffs could re-file the claims as part of a derivative suit. Should the New York City Employees' Retirement System decide to re-file, their case would likely be added to an existing claim like the SEC's suit Ms. Heinen.
Apple is currently trading at US$165.90, down 0.21 (0.13%).