Jobs faces fresh charges over options scandal

 

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Posted on 2 Jul 2008 at 11:57

Steve Jobs has again been accused of wrongdoing as questions over his exact role in Apple's stock options backdating scandal refuse to go away.

Apple's own enquiry has exonerated its chief executive, but along with other board members and former executives, Jobs now faces fraud charges brought by two plaintiffs, Martin Vogel and Kenneth Mahoney.

Vogel and Mahoney allege that all the accused participated in the decision to backdate options without making the appropriate notification in the company's accounts.

"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 lawsuit alleges.

Apple has admitted to the impropriety and amended its accounts as necessary, but insists that although Jobs knew of the backdating, he was not aware of the accounting implications and did not profit form the options he received, as he handed them back.

US financial regulators have not indicated that they plan to take action against Jobs or his fellow board members named in Vogel and Mahoney's filing: William V Campbell, Millard S Drexler, Arthur D Levinson and Jerome B York. However they are pursuing a case against former general counsel Nancy Heinen, who denies all wrongdoing, and has settled with former chief financial officer Fred Anderson, though he did not admit guilt, insisting that Jobs had given him the go-ahead.

Vogel and Mahoney are not alone in attempting to claim compensation from Apple. They claim that the scandal wiped $7 billion from Apple's market value, money that as shareholders they are entitled to. In another action, a group of shareholders claims that Jobs has since made $1 billion from shares he exchanged for the backdated options, while a third lawsuit brought by a Boston pension fund accuses Apple directors of wasting more than $105 million on the options granted to Jobs.

Apple does not comment on ongoing legal matters.

Author: Simon Aughton