radioactive age dating - Option backdating and its implications

If you cover it up and fail to report that expense, the way Apple's folks allegedly did, well, that amounts to accounting fraud.While a few of those 38 terminations may turn out to be the result of such activity, it's likely that the vast majority fell on their swords to avoid sullying the good names of their companies.After all, stock option backdating is all the rage these days.

Never mind that Anderson, in a press release, claimed to have informed Jobs of the accounting implications of backdating options in 2001.

Or that Jobs gave up his outstanding options, which were "underwater," in exchange for 5 million restricted shares in 2003.

In a settlement announced concurrent with the complaint, Anderson - who neither admitted nor denied the allegations - agreed to pay back $3.6 million and never to do bad stuff again.

That seemed like a contradiction to me, but whatever.

This apparently violates a whole bunch of SEC rules.

Heinen also exercised and sold 400,000 back-dated shares.For the problem wasn't, in any large or grand manner, how Jobs treated this options grant in his personal income tax return: it was the way that Apple treated it when reporting its profits to investors.Further, note that there's nothing wrong with backdating options, nor even with the price at which they were granted: it is purely a problem of how the transaction was recorded, nothing more.In 2006 an internal company inquiry found that this grant was "improperly recorded" as having been made at a special board meeting that never took place, but largely exonerated Jobs over the matter, saying that the options had been returned without being exercised and that he was "unaware of the accounting implications".In 2007 the US Securities and Exchange Commission announced that it would not file charges against Apple, but had filed charges against two former executives for their alleged roles in backdating Apple options.Yes, of course, there's much more that can be said about Jobs and my Forbes colleagues are saying all of it over here.

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