Jobs ignores backdating concerns

Recently, there have been allegations of Jobs backdating stock options. Backdating stock options refers to when companies change the date of a grant in order to accrue more profits. This is not always illegal, and usually when the company is upfront about it to shareholders and the government, it does not present a problem. However, when it is not reported, it could be a sign of less than full disclosure to shareholders, evasion of some taxes, or modified earnings statements (to make the company look like it is doing better financially than it really is. The Securities and Exchange Commission have investigated two of Apple's employees, but cleared both them and the company of any wrongdoing. During a question and answer session, Jobs stated that the disputed October 2001 grants were actually approved in August of that year, two months before they hit their very low prices. 80 other companies are under investigation for the same practice said the SEC last week.

I think backdating stock options seems very sneaky as if the company is trying to hide something. This suspicion is even stronger when you think about how doing such a practice could help you financially, such as avoiding some taxes and attracting more investors that would not invest without a modified earnings statement. Modifying earnings statements is reminiscent of Enron and the scandal in which scores of employees lost their entire life savings. I do not think we should be leaving ourselves open to another crisis like that by allowing backdating.