Apple wins dismissal of shareholder backdating lawsuit
Posted by Dennis Sellers 
Nov 15, 2007 at 1:31pm
Apple has won dismissal of a shareholder lawsuit claiming company officers including CEO Steve Jobs were overpaid with illegally backdated option awards, reports Bloomberg.
U.S. District Judge Jeremy Fogel in San Jose, California, dismissed the case in an order today. Apple said last year that 6,428 stock-option grants issued between 1997 and 2002 were backdated.
The New York City Employees’ Retirement System, the lead plaintiff in the case, acknowledged that Apple’s stock price didn’t fall as a result of the backdating, which is the most common basis for shareholder claims, notes Bloomberg. Instead, the retirement system argued the awards caused Apple to dilute its stock by issuing more than 200 million shares that weren’t properly accounted for or disclosed.
“While the subsequent disclosure that the options were backdated might require a restatement, without a discernable drop in the stock price there is no basis upon which to establish an injury to shareholders,’” Fogel wrote in his opinion.
Apple, based in Cupertino, California, found no misconduct by Jobs, who recommended favorable dates on some option grants other than his own. The company recorded $84 million in charges to correct its accounting. Bloomberg notes that in dismissing the lawsuit, Fogel allowed shareholders to refile the claims as a so-called derivative suit arguing the alleged violations hurt the company. The case would then likely be folded into an existing derivative claim, according to the order.
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Dennis Sellers
Dennis has been a newspaper editor/reporter (seven years) and teacher (seven years). He has over 4,000 magazine, newspaper and online articles to his credit. He has also covered the Mac and tech industries for over a decade for such online publications as MacCentral, MacMinute and now MacsimumNews.
