Apple shareholder lawsuit over backdating dismissed
Given the dramatic rise in Apple's stock price over the past year, a judge ruled that the plaintiffs can't establish that Apple's stock-option backdating hurt the value of the stock.
New Apple General Counsel Daniel Cooperman won his first battle on behalf of his new company yesterday, successfully convincing a judge to dismiss a shareholder lawsuit over Apple's stock-options backdating mess.
The New York City Employees Retirement System had sued Apple claiming that the company's practice of backdating stock options diluted the value of the stock. Apple has admitted that it improperly backdated stock options on several occasions, including two awards to CEO Steve Jobs, and last December it took a $84 million charge to account for the options.
But the suit had to show that Apple shareholders lost money in order to recover damanges, and the judge apparently took one look at Apple's stock performance over the last year and said, "Sorry." Bloomberg reported that the judge said he couldn't establish a value for the injury suffered by shareholders without a drop in the stock price, and Apple's stock price has almost doubled in the last year.
The decision does allow the plaintiffs to try again and claim that the backdating hurt the company in general, if it didn't hurt shareholder value, but they'll have to get in line with other plaintiffs claiming the same thing. Other legal actions over the backdating scandal are also occupying Cooperman's time, perhaps most notably the Securities and Exchange Commission's suit against Nancy Heinen for which Jobs has reportedly been subpoenaed.