Apple Computer has announced that it would delay filing an annual report to Securities and Exchange Commission due to the ongoing investigation of its pat stock option practices. The California based company has stated that a special committee constituting its board of directors has found irregularities in its stock option grants. The company further said that it would restate its historical financial statements to take notes non-cash charges for compensation cost pertaining to past option grants.
Since the company is already in determining the time period and amount of the restated results, it missed the December 14 deadline for filing Form 10-K. The company further informed that the report covering the fiscal year ending on September 30 will be filed within a month.
In October the in-house investigation committee has hinted that there is pressing need for the company to restate its finances. The investigation revealed that there are at least 15 dates between 1997 and 2000 that appeared to include grant dates in which grants were approved.
When a company backdate stock option, the options should be issued retroactively in order to correspond with the low points of the stock price that can consequently increase the profit of the beneficiary. This practice, as a matter of fact, is not illegal but it must be revealed to investors and should be accounted properly.
In the meanwhile, Dell also announced that it would delay filing its third quarter data as the SEC and U.S. Attorney General for the Southern District of New York are investigating its financial statements. The analysts have argued that these companies involved in backdate stock option scandals can only turn things around by revealing the truth.
