It seems that the scandal related to Apple backdating stock options has gotten a little more...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
It seems that the scandal related to Apple backdating stock options has gotten a little more serious. According to the Financial Times, in 2001 Steve Jobs was granted 7.5 million stock options without the proper authorization of Apple's board of directors, and it now appears that someone falsified board meeting records to make it look as if Jobs had received authorization for the grant. The Securities and Exchange Commission is weighing whether to take action against Apple and/or any of the individuals involved, though whether Jobs himself might potentially be in any legal hot water is unclear. Jobs returned all granted options to Apple before exercising them, which perhaps explains why the company issued a statement in October saying that an internal investigation had cleared him of any wrongdoing (the company did force a former CFO from its board). Whether the SEC decides to go after Apple, Jobs or anyone else at the company remains to be seen, but the FT notes that plenty of other CEOs have resigned in the wake of similar backdating scandals. You could argue that given how well Apple's stock has done over the past year that even shareholders who feel cheated by what happened would rather own stock in a company helmed by Jobs than one without him, but rules are rules and if turns out that anyone at Apple broke the law it's unlikely that the Feds will go easy on them. (i) Please summarize the apple's option backdating scandal. What is the misconduct? (ii) Is option backdating allowed in the U.S? Is it allowed in HK? (iii) Is there any regulations to prevent illegal backdating? If your answer is YES, what is the possible new problem(s) raised by the regulations? It seems that the scandal related to Apple backdating stock options has gotten a little more serious. According to the Financial Times, in 2001 Steve Jobs was granted 7.5 million stock options without the proper authorization of Apple's board of directors, and it now appears that someone falsified board meeting records to make it look as if Jobs had received authorization for the grant. The Securities and Exchange Commission is weighing whether to take action against Apple and/or any of the individuals involved, though whether Jobs himself might potentially be in any legal hot water is unclear. Jobs returned all granted options to Apple before exercising them, which perhaps explains why the company issued a statement in October saying that an internal investigation had cleared him of any wrongdoing (the company did force a former CFO from its board). Whether the SEC decides to go after Apple, Jobs or anyone else at the company remains to be seen, but the FT notes that plenty of other CEOs have resigned in the wake of similar backdating scandals. You could argue that given how well Apple's stock has done over the past year that even shareholders who feel cheated by what happened would rather own stock in a company helmed by Jobs than one without him, but rules are rules and if turns out that anyone at Apple broke the law it's unlikely that the Feds will go easy on them. (i) Please summarize the apple's option backdating scandal. What is the misconduct? (ii) Is option backdating allowed in the U.S? Is it allowed in HK? (iii) Is there any regulations to prevent illegal backdating? If your answer is YES, what is the possible new problem(s) raised by the regulations?
Expert Answer:
Answer rating: 100% (QA)
SOLUTION i The Apple option backdating scandal refers to a situation in which the company granted stock options to its employees at a date earlier tha... View the full answer
Related Book For
Systems analysis and design
ISBN: ?978-1118808177
5th edition
Authors: Alan Dennis, Barbara Haley Wixom, Roberta m. Roth
Posted Date:
Students also viewed these finance questions
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
a. Consider the effect of population growth on the allocation on the dynamic efficient allocation of a depletable resource across time. Suppose we have two versions of the two-period model, discussed...
-
A thin-walled metal spherical shell of radius a has a charge qa. Concentric with it is a thin-walled metal spherical shell of radius b > a and charge qb. Find the electric field at points a distance...
-
Denise Ondeyko, CPA is drafting an audit program to test controls over the Purdue Corporation's cost records. Required: 1. Explain the importance of determining the disposition of overapplied and...
-
The following transactions occurred during April 2010, for Sandy Salon Products, Inc.: Requirement 1. Journalize the April transactions for Sandy Salon Products, Inc. Omit explanations. Apr 3...
-
In 2013, Winslow International, Inc.s controller discovered that ending inventories for 2011 and 2012 were overstated by $200,000 and $500,000, respectively. Determine the effect of the errors on...
-
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Vaughn Manufacturing Statement...
-
The Shop at Home Network sells various household goods during live television broadcasts. The company owns several warehouses to hold many of the goods it sells, but also leases extra warehouse space...
-
What are some emerging trends and challenges in the accounting profession, and how do accountants adapt to them?
-
Write code to output the following pattern: ** ** ** * * **** * ** **
-
eBay was started in 1995 by an entrepreneur, Pierre Omidyar, working from his home. In 2009, the company he founded had over 90 million active users worldwide and a net profit of over $8.7 billion,...
-
The town of Verey, Switzerland, perches among the vineyards above Lake Geneva. Wealthy retirees take in Alpine vistas as they pass their afternoons strolling along the waterfront. The most exciting...
-
Toyotas vehicle recalls: responses, problems and concerns Introduction Between October 2009 and July 2010, Toyota Motor Corporation recalled 8.5 million cars and trucks. The design and quality...
-
Is use of the Internet appropriate only for large companies? Explain.
-
Sylar Company insured the life of its president for P1,000,000, with it being the beneficiary. The annual premium is P40,000 and the policy is dated January 1, 2016. The cash surrender values are...
-
PC Contractors, Inc., was an excavating business in Kansas City, Missouri. Union Bank made loans to PC, subject to a perfected security interest in its equipment and other assets, including...
-
Interviews should always be conducted as structured interviews." Do you agree with this statement? Why or why not?
-
Why is content awareness important?
-
Create several guidelines for developing good documentation.
-
If the least-squares regression line has slope b1 = 5, and two x-values differ by 3, the predicted difference in the y-values is _____________________. In Exercises 57, fill in each blank with the...
-
For each of the following plots, interpret the y-intercept of the least-squares regression line if possible. If not possible, explain why not. a. The least-squares regression line is = 1.98 +...
-
Substituting the value of the explanatory variable for x in the equation of the least-squares regression line results in a prediction for y. In Exercises 812, determine whether the statement is true...
Study smarter with the SolutionInn App