Shareholders sue Apple, alleging violations of the Securities Exchange Act
Apple shareholders Martin Vogel and Kenneth Mahoney have accused the Apple company, its CEO Steve Jobs, the former head of finance Fred Anderson, and other managers, of violating the Securities Exchange Act. They are hoping to recoup a loss in the value of their shares that they ascribe to the revelation of backdated share options, and have lodged a class action with the San Jose office of the California Northern District Court.
They claim that, shortly after the revelation of irregularities, the Apple share price fell by 14 per cent, wiping out more than $7 billion of shareholders' assets. In November 2007, the San Jose court had already dismissed two actions founded on the backdated share options. One of these cases was ruled to be barred by lapse of time, while in the other the judge found that only a "perceptible fall in the share price" could damage the shareholders, but that had not been the case here.
Apple had admitted in June 2006 that there had been irregularities in the share options provided to senior staff members. A subsequent investigation confirmed the suspicion that, between 1997 and 2002, these share options had been backdated by Apple. On fifteen occasions, options were backdated to a date on which a more favourable share price yielded higher profits. Observers do not expect further details of the case to be revealed in the course of this new suit.