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...
-
Steam is supplied in a line at 450 lbf/in 2, 1200 F. A turbine with an isentropic efficiency of 85% is connected to the line by a valve and it exhausts to the atmosphere at 14.7 lbf/in 2. If the...
-
A machine part will be cycled at 48 kpsi for 4 (103) cycles. Then the loading will be changed to 38 kpsi for 6 (104) cycles. Finally, the load will be changed to 32 kpsi. How many cycles of operation...
-
A countercurrent leaching system is recovering oil from soybeans with five stages. On a volumetric basis, liquid flow rate/solids flow rate \(=1.36\). Recovery of oil in the solvent is \(97.5 \%\)....
-
The following information was taken from the records of Crowley Cosmetics, Inc., at December 31, 2012: Requirements 1. Prepare Crowley Cosmetics single-step income statement, which lists all revenues...
-
20.1A (Static) Setting Sales Price and Computing the Break-Even Point (LO20-4, LO20-5, LO20-6, LO20-7) Ionic Charge is a newly organized manufacturing business that plans to manufacture and sell...
-
Jones Contractors Inc. agreed to construct a building for 5300,000. Construction commenced in 2011 and was completed in 2013. Data relating to the contract are summarized below: Required: a. For each...
-
Let R be the region enclosed by the polar curve r(0)=22sin(0), as shown in the graph. 1+ + 1 R Which integral represents the area of R? Choose 1 answer:
-
Push versus pull refers to pushing or pulling what?
-
14 P 3 Perform the indicated calculation.
-
Does lean operation rely more on precise calculations or reaction to signals?
-
7 C 5 = 7 C 2 Determine whether the statement is true or false. If it is false, rewrite it as a true statement.
-
Is a lean operation considered a push or a pull system?
-
Rachelle has purchased a fairly new home valued at $275,000. What should she budget for her annual maintenance costs?
-
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.
-
How does monopoly lead to inefficiencies?
-
What is the welfare loss in monopoly?
-
Does monopoly retard innovation?
Study smarter with the SolutionInn App