First service backdating stock options
Steve Dowling, a spokesman for Apple, declined to comment on Jobs's conversations with Anderson.
Dowling emphasized that the SEC did not "file any action against Apple or any of its current employees." Government authorities praised Apple for coming forward with the backdating problems last year and for sharing information with investigators.
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Clearly, the Enron trials have not closed the book on corporate fraud.
Below are our recommendations with respect to oversight of stock option grant and other equity compensation programs.
Recently, media and regulatory attention has been directed at two types of potential problems with respect to option grant practices.
and certain individual defendants for a record-breaking 5 million.
A stock option gives the recipient the right to purchase stock at a set price.
That exercise price, or strike price, usually takes one of three forms: the closing price on the day of the grant; an average of the highs and lows of the day; or the closing price from the previous day.
One example of the targets of these investigations is where a company grants stock options immediately prior to the issuance of a positive earnings report or other public notice of good news about the company, where the earnings report or other news is expected to result in an increase in the value of the company’s stock (referred to as "spring loading").
A variation on this practice is to intentionally delay a stock option grant until after the public disclosure of bad news about the company in order to provide the option holder with the benefit of a lower stock price (referred to as "bullet dodging").