Feds probing possible forgeries

One analyst says the fears of wrongdoing at Apple are overblown.
SAN JOSE, Calif. (AP) -- Federal prosecutors are probing whether former Apple Computer Inc. officials forged documents to maximize executives' profits from stock options, according to a legal publication that also reported CEO Steve Jobs has hired his own lawyers to represent him in the investigation.
Shares of the iPod and Macintosh computer maker went on a roller-coaster ride in trading Wednesday, falling almost 5 percent before rebounding by midday.
In a morning note, UBS Investment Research Analyst Ben Reitzes called investors' fears "overblown."
The Recorder, a San Francisco-based publication owned by American Lawyer Media, reported late Tuesday that federal prosecutors are looking into forged documents at Apple related to administering stock options. The report cited people with knowledge of the case who requested anonymity because the case is the subject of criminal and civil government investigations.
Apple spokesman Steve Dowling said the company is providing the Securities and Exchange Commission with the results of its internal investigation into its stock options granting practices, but had no further comment Wednesday.
Hired counsel
The publication also reported that Jobs has hired his own outside counsel separate from the company's legal team.
"Investors seem to be reacting to the mention of Steve Jobs," Reitzes said in his note. "We believe it could make sense to obtain counsel given his immense personal fortune and influence."
Apple is one of nearly 200 companies that have disclosed SEC, DOJ or internal investigations for potential backdating of stock options. Backdating refers to retroactively pegging the strike price of an option to a day when the stock traded cheaply. Options with low strike prices are more valuable to their owner because they are less expensive to exercise.
In October, Apple said the internal investigation raised concerns about how two former officers recorded and accounted for stock options. Citing people with knowledge of the investigation, The Recorder also reported that those two former officers were General Counsel Nancy Heinen and Chief Financial Officer Fred Anderson.
Report delayed
On Dec. 15, Apple said it was delaying filing its annual report with the Securities and Exchange Commission due to its ongoing investigation into stock option grants. In a filing with the SEC, the company said it needs to restate historical financial statements to record charges for compensation related to past grants. As a result, Apple was unable to file its 10-K Form for the fiscal year ended Sept. 30 by the required filing date of Dec. 14.
Apple expects to file its annual report and its quarterly report for the period ending July 1 by Friday.
Shares of Cupertino, Calif.-based Apple Computer were up 1 cent at 81.52 in trading Wednesday on the Nasdaq. The stock has traded in a range of 50.16 and 93.16 in the past year.