sounds like

lawyer heaven. a company suing itself.

Let me see if I understand

I can buy liability insurance against making fraudulent financial transactions? So, if I put in my tax return that I earned only £1,000 last year and the authorities find out, the fine will be paid by the insurer?? What if I get caught holding up a bank, will they send someone else to do the time for me???

Where do I sign????

One rule for the rich?

<quote>Anderson settled with the SEC for $3.5m without admitting wrongdoing, and Heinen paid $2.2m just last month for a similar arrangement.</quote>

No comment.

Shameful USA regulators (SEC)

Although there were undoubted abuses of so called "backdating", Apple's along with most of the others, shows no signs of being deliberate, or even significant.

No case has reached court; no-one's been convicted of anything, the total size of out-of-court settlements in relation to the size of the business is like an ordinary bloke paying his neighbour a hundred quid because he scraped a fence post while parking his car. And forty quid of that is to pay the neighbour's solicitor's fee for writing a snotty letter.

Nobody in fact backdated anything. It's all about "option grant date", which the US regulators defined retrospectively after Sarbanes-Oxley, catching out nearly every company that had issued stock options. The result was the date companies had been using was generally earlier, thus creating the claim that somehow dates were deliberately altered - they weren't - the "wrong" ones were used from the start.

Here's what it's about, translated into "ordinary bloke" things. Suppose you have a buy-to-let house. On January 1st a developer comes to you and the owners of the neighbouring properties saying he wants to apply for planning permission for a block of flats, therefore wants to purchase from you a 2 year option to buy your house at, say, 40% over current market price. You agree. A month later the legal paperwork is completed. During that time, it turns out later that property prices went up 1%. What the regulators are saying is that since he could have backed out during January, that 1% increase was effectively "money in the bank" for the developer when the paperwork was completed, and he should pay tax on that benefit as of 1st February, even if he never exercises the option or gets planning permission.

Companies like Apple recorded January the first as the date of the deal, and deducted employee tax on that basis. They were using procedures defined and documented by independent specialist options lawyers. Retrospectively the US regulators declared those procedures flawed.

For this, a perfectly good CFO (ultimately responsible for the accounting) and General Counsel (ultimately responsible for options legal documents) had to sacrifice their careers.

It certainly looks to me that this is "deep capture". The SEC looked the other way as Wall Street bankers fleeced the working population of their future earnings by financing an asset bubble where workers theoretically took the risk of falling house prices. Regulation there was so weak that many workers have committed to pay more than they can possibly afford, and it's blown up in the bankers' faces.

Where are the decent investigative journalists when you need them?

So the only benificiaries are...

... the lawyers?

What a great system.

Cross-eyed

"Under Apple's proposed settlement, $14m will be paid to Apple – not by the officers and directors themselves, but by their liability insurers."

This article makes me go all cross-eyed. I fully appreciate I "don't get it", but as I read it Apple are getting $14m from their insurers, for something they did? Sounds like a marvellous way to make money - scam your insurers!

Apple's not paying itself

It's the officers of the company (Steve Jobs et al) in their position as officers who are paying to compensate the company (Apple) for having done the options accounting slightly wrong to the supposed detriment of the company.

The officers of the company are claiming on their professional indemnity insurance to pay the settlement to the company.

Lawyers dig up a couple of shareholders (and for all I know get someone to slip them a few thousand dollars) to be "plaintiffs" they can act for, in the hopes of collecting their juicy fees ($8.5M) from Apple if it al works out.