The Macalope

BusinessWeek’s Peter Burrows talked with options expert Erik Lie. Lie doesn’t think Jobs is necessarily out of the woods, but the Macalope found the last graph most interesting.

I then asked if he thought Jobs was getting an easier time than the dozens of other executives that have lost their jobs over the backdating scandal, simply becuase of Jobs’ celebrity and iconic reputation with investors and consumers. He said no. Rather, he pointed out his belief that there are many executives that have flouted options accounting rules that have not yet even been identified. “I believe there are potentially thousands of executives who have gotten completely off the hook. Because he’s steven jobs, he’s more in the spotlight….The media has been struggling to put a face on this scandal. If anything, he’s been treated unfairly relative to other people who have been completely unscathed.”

The Macalope has been harder on Jobs and Apple over the backdating of options than many other members of the Apple community, but he thinks Lie is absolutely correct here.

And you can scroll down for his “Martha Stewart” comment below as evidence that this isn’t a case of the tail wagging the Macalope.

Apple Says Options Probe Exonerates Executives

Apple Computer today exonerated its chief executive, Steven P. Jobs, of any wrongdoing in a stock options backdating probe.

Sometimes it’s hard to be a woman
Giving all your love to just one man
You’ll have bad times

As a result of the internal investigation, Apple said it would record $84 million in expenses related to the options awards.

And he’ll have good times

The news helped push shares of Apple up more than 5 percent this morning to just over $85.

Doin things that you don’t understand
But if you love him
You’ll forgive him

“The board of directors is confident that the company has corrected the problems that led to the restatement, and it has complete confidence in Steve Jobs and the senior management team,” the statement said.

Even though he’s hard to understand
And if you love him
Oh, be proud of him
Cause after all he’s just a man

But Mr. McGurn noted that Apple faced unique challenges.

“Apple is in a much more difficult position than other companies in the backdating morass, because a significant portion of its market valuation is based on Steve Jobs staying at his job,” he said.

Stand by your man
Give him two arms to cling to
And something warm to come to
when nights are cold and lonely

The language of Apple’s statement, coupled with the simultaneous resignation from the board of Fred D. Anderson, the company’s former chief financial officer, led analysts to believe that Apple and Mr. Jobs were attempting to distance themselves from any blame in the case.

Stand by your man
And show the world you love him
Keep giving all the love you can
Stand by your man

“Everything we know about Apple is that the compensation side is not something Jobs has ever been involved in,” Mr. Munster said. “The key thing, and the only thing Wall Street cares about, is whether Jobs will be impacted, and we don’t believe he will be.”

Stand by your man
And show the world you love him
Keep giving all the love you can
Stand by your man

Overnight the Financial Times reported that the forged stock option documents related to Steve Jobs’ grant of 7.5 million options in 2001.

The question now is, is it likely that Jobs knew that documents were being falsified for his granting of the 7.5 million options?

To the Macalope it seems highly unlikely that Jobs was not intimate with the details of his compensation, but most executives focus on “what am I going to get”, not the steps that might have been jumped over to get them there. Jobs, in particular, seems to be an individual who is comfortable as long as he knows he’s being handsomely rewarded for his Herculean efforts and only expects to make money if the company does well.

The company has stated that Jobs was not aware of the “accounting implications” involved. Is claiming something was approved at a board meeting when it was not an “accounting implication”? Possibly.

The Wall Street Journal’s Law Blog (paid subscription) asks today whether readers think Apple’s close-to-the-vest-approach or United Healthcare’s open approach is better. From an investor’s standpoint, clearly United Healthcare’s approach is better, but there are several hundred degrees of difference in magnitude between the two.

The United Healthcare executives were receiving salaries and colluding to cover up the backdating of hundreds of millions of dollars in stock options. Even if Jobs is implicated in the forging of the documents related to his relatively paltry 7.5 million options — options he was ultimately given a market value for but never actually exercised and no longer owns — it’s questionable if it’s material enough to cause him to have to step down.

Still, criminal proceedings in high-profile securities cases often turn on more than intent and the relative level of benefit (see: Stewart, Martha). Apple could become the poster child for stock option backdating prosecution and, call the Macalope cynical, but with an SEC chairman appointed by the Republican rival of a Democrat on the board of the company, it’s got to be a tempting target.

Holiday’s over. Here’s your rude awakening.

Apple reportedly falsified options documents.

Original Law.com piece by Justin Scheck with the allegations here.

It looks like the meat of the information relates to possible wrongdoing by former execs Nancy Heinen and Fred Anderson. While there are number of “if the SEC is going to go after Steve Jobs” type statements, there’s absolutely no information that implicates Jobs in the falsification of these documents.

While it will likely take some time — perhaps a matter of months — for the government to decide whether to file criminal charges against Jobs, the 10(k) filing on Friday should provide plaintiffs lawyers with some ammunition for their suits against the company.

Hey, if he’s done nothing wrong, it could take them years to decide as they would have to wait for him to do something wrong.

That is a rather irresponsible paragraph, unless Scheck knows something more that implicates Jobs. The only evidence provided is that he has retained his own legal counsel, which raises a few of the hairs on the Macalope’s velvety flanks, but is hardly damning given the fact that Jobs is personally named in the class action suit against the company.

We’ll know more on Friday.

UPDATE: Gene Munster of Piper Jaffray sez there’s less than a five percent chance Steve Jobs is at risk.

The Macalope likes those odds but how do you calculate that?

The Macalope holds an inconsequential number of Apple shares.