John Paczkowski

Recent Posts by John Paczkowski

I Know It Was You, Fredo. You Broke My Heart. You Broke My Heart!

itwasyoufredanderson.jpg

The truth of the matter is everything is fine. We’ve shared it all with the SEC. It’s raised questions, but some of the journalism has been so off the mark. But I know the truth. It’s painful to read some of this stuff, but I know it’s kind of ridiculous and will pass.”

Apple CEO Steve Jobs, the New York Times, Jan. 12, 2007

Apparently, Fred Anderson is the “Fredo” of the Apple options backdating family. This morning Anderson, who resigned as Apple’s CFO in October of 2006, issued he advised Apple CEO Steve Jobs of the accounting implications that might arise from the backdating of stock-options grants in January 2001. This, of course, runs contrary to the party line at Apple, which has held, vehemently, that Jobs wasn’t aware of the accounting implications of backdating. From Anderson’s statement:

Fred was told by Steve Jobs in late January 2001 that Mr. Jobs had the agreement of the Board of Directors for the Executive Team grant on Jan. 2, 2001. At the time Mr. Jobs provided Fred this assurance, Fred cautioned Mr. Jobs that the Executive Team grant would have to be priced based on the date of the actual Board agreement or there could be an accounting charge. He further advised Mr. Jobs that the Board would have to confirm its prior approval in a legally satisfactory method. He was told by Mr. Jobs that the Board had given its prior approval and the Board would verify it. Fred relied on these statements by Mr. Jobs and from them concluded the grant was being properly handled.”

You can almost hear the shrieks of outrage from 1 Infinite Loop, can’t you?

Anderson’s statement hit the wires just after the Securities and Exchange Commission filed a lawsuit against Nancy Heinen, former general counsel at Apple, alleging her actions led to “fraudulent” stock-option backdating at the company (see “We Used an AirPort Extreme to Extend Steve’s “Reality Distortion Field” to SEC Headquarters“). Meanwhile, Anderson himself has agreed to a settlement with the SEC that calls for him to pay $3.5 million in fines and penalties, but does not require him to admit liability.


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work