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In comparison, had the options been granted at the year-end price when the decision to grant to options actually might have been made, the year-end intrinsic value would have been zero.

Backdating does not violate shareholder-approved option plans.

Criminal Investigation Potential Criminal Charges Potential Defences Consequences of a Guilty Plea or Verdict On October 24 2006 the growing stock options backdating scandal reached a milestone when David Kreinberg, former head of finance at software maker Comverse Technology Inc, received the first criminal conviction to stem from the scandal.

Kreinberg pleaded guilty to conspiracy and securities fraud, admitting to having knowingly backdated the exercise price on stock options to a low point in the stock price.

More than 130 companies are undergoing federal investigations into their options grants and more than 50 executives and directors have retired, resigned or been fired as a result of stock options internal investigations.

The Department of Justice has formed a stock options taskforce to coordinate the criminal investigations.

Backdating allows executives to choose a past date when the market price was particularly low, thereby inflating the value of the options.

An example illustrates the potential benefit of backdating to the recipient.Jasper signed all of Maxim’s filings with the SEC at that time.Liability was found in the Maxim case partly because backdating and a failure to expense the practice were proven, Fickes notes.A similar lawsuit against Anderson was filed but simultaneously settled.The SEC said it doesn't plan to file any actions against Apple as a company.Former Apple Chief Financial Officer Fred Anderson issued a statement Tuesday claiming that he advised Apple CEO Steve Jobs of the accounting implications of backdating in January 2001, contrary to Apple's previous statements that Jobs had no idea of the ramifications.

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