Feeds

Apple agrees to pay itself $14m

Settles backdating lawsuits (almost)

Intelligent flash storage arrays

Apple has agreed to pay itself $14m in order to settle shareholder lawsuits over improperly backdated stock options awards.

A preliminary settlement, approved Monday by Judge Jeremy Fogel in US District Court for Northern California, will end 19 separate derivative lawsuits filed by Apple shareholders against Apple's top executives and board members.

Defendants named in the 14 state and five federal cases include CEO Steve Jobs, former CFO Fred Anderson, former general Counsel Nancy Heinen, current CFO Peter Oppenheimer and others.

A derivative lawsuit is typically initiated by a shareholder on behalf of the company. Proceeds of a successful action are usually rewarded to the company, rather than the individual.

Attempts by shareholders to sue on their own behalf have thus far been unsuccessful. Particularly in light of Apple having offered cash payments to make up for the shortfall and the stock price having risen since the backdating scandal was uncovered in late 2006.

Under Apple's proposed settlement, $14m will be paid to Apple – not by the officers and directors themselves, but by their liability insurers. Apple said in a court filing that the sum represents a "substantial percentage" of the maximum possible recovery Apple would have received if the plaintiffs prevailed on their claims. Apple also agreed to pay a total of $8.85m to federal and state attorneys representing the plaintiffs.

If it passes final muster, the settlement will end the derivative cases that accuses Apple brass of hurting the company by knowingly altering the dates of when stock option grants were awarded to executives so that they appeared to have been given when the price was at a low. Backdating isn't illegal in itself – but the practice needs to be divulged to the US Securities and Exchange Commission or things get sticky.

Apple already received a rap on its chamber the door from government regulators, and duly admitted it incorrectly accounted for share options.

After an internal investigation, the company blamed ex-financial chief Fred Anderson and ex-general council Nancy Heinen for the trouble. Anderson settled with the SEC for $3.5m without admitting wrongdoing, and Heinen paid $2.2m just last month for a similar arrangement. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.