Apple is subject to a new class action lawsuit over its admission of irregularities in the way it has granted stock options to senior executives in the past.
A fresh lawsuit was filed on 24 August 2006 in the US District Court for the Northern District of California by the law firm of Kantrowitz, Goldhamer & Graifman.
It represents the case of shareholders who purchased Apple stock between 1 December 2005 through 11 August 2006.
The Complaint charges that Apple and certain of its officers and directors violated certain sections of the US Securities Exchange Act of 1934.
It alleges that defendants made false and misleading statements and omissions concerning Apple's improper and undisclosed practice of backdating options conferred on certain executives, which made it appear that such options were issued on dates when the market price of Apple stock was higher than actual market price on the actual grant dates.
Under generally accepted accounting principles, these profits were required to be recognised as an expense in Apple's financial statements for the appropriate period, but were not.
This means the suit accuses Apple that financial statements in its Form 10K filing for the fiscal year 2005 and interim financial statements for 2005 and 2006 were materially false and misleading.
The suit also alleges that statements made by Apple during its 2006 shareholders meeting were false and misleading because they concealed Apple's practice of backdating stock options.
Plaintiffs seek to recover damages on behalf of class members and are represented by the law firm of Kantrowitz, Goldhamer & Graifman and its co-counsel, Stull, Stull & Brody.
Shareholders who aquired Apple stock within the described period have until 24 October to join the class action.