Shareholders refile, amend complaint against Apple

Posted by Dennis Sellers Dec 21, 2007 at 9:35am

Shareholders suing officers and directors of Apple refiled their claims on Wednesday to address a judge’s ruling that some fraud complaints were too old and that the lawsuit contained scant details about wrongdoing by the company’s top officials, reports Reuters.

The second amended shareholder derivative complaint, filed late on Wednesday in San Jose federal court, adds four additional instances of alleged backdating by the Apple executive team and directors. The original lawsuit was filed in June of 2006.

The new complaint tallies up proceeds of the exercise by Apple executives of the backdated options at more than US$1 billion and places the value of shares held by Apple CEO Steve Jobs that were received in exchange for backdated options at nearly $1 billion, notes Reuters.
The amended lawsuit also ties the Apple board closer to the backdating of shares to executives by alleging that the full board acted as the company’s compensation committee when it signed off on options with false grant dates, the article adds.

It removes federal securities fraud claims arising before June of 2001 after U.S. District Judge Jeremy Fogel ruled last month that the claims were barred by the statute of limitations. Reuters says that the suit still alleges breach of fiduciary duty under state law that occurred before 2001 on the grounds that the fraud was concealed by Apple management until recently, according to lead attorney Mark Molumphy, of Cotchett Pitre & McCarthy. In response to the judge’s request, the new suit adds details about two 2001 backdating options that are also the focus of an U.S. Securities and Exchange Commission lawsuit.

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