Judge Dismisses Apple Backdating Suit
A shareholder suit against Apple was thrown out Nov. 14 after a federal judge found the company's backdating scandal did not negatively impact its stock price.
November 16, 2007 at 06:14 AM
1 minute read
The original version of this story was published on Law.com
A shareholder suit against Apple was thrown out Nov. 14 after a federal judge found the company's backdating scandal did not negatively impact its stock price.
The plaintiffs, led by the New York City Employees' Retirement System, alleged that the illegal backdating practices–which resulted in the issuance of more than 200 million improperly disclosed shares–diluted the value of Apple's stock.
U.S. District Judge Jeremy Fogel dismissed the case, noting that “without a discernible drop in the stock price there is no basis upon which to establish an injury to shareholders.” Fogel said Apple shareholders could amend their claims and refile a derivative suit arguing the company was harmed by the backdating practices.
Apple announced in 2006 that stock options granted between 1997 and 2002 had been backdated, benefiting Apple executives including CEO Steve Jobs.
The SEC in April 2007 charged former Apple GC Nancy Heinen with fraud related to the backdated grants and the altering of corporate records to cover up the backdating. Heinen is fighting the charges.
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