Corporate crime

2014-05-03-NYT-steve-jobs-a-genius-at-pushing-boundaries-too

Steve Jobs, a Genius at Pushing Boundaries
by James B. Stewart
New York Times Business Day, Common Sense 2014-05-03

If Steve Jobs were alive today, should he be in jail?

That’s the provocative question being debated in antitrust circles in the wake of revelations that Mr. Jobs, the co-founder of Apple who’s deeply revered in Silicon Valley, was the driving force in a conspiracy to prevent competitors from poaching employees. Mr. Jobs seems never to have read, or may have chosen to ignore, the first paragraph of the Sherman Antitrust Act:

Every “conspiracy, in restraint of trade or commerce” is illegal, the act says. “Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine” or “by imprisonment not exceeding three years, or by both said punishments.”

Mr. Jobs “was a walking antitrust violation,” said Herbert Hovenkamp, a professor at the University of Iowa College of Law and an expert in antitrust law. “I’m simply astounded by the risks he seemed willing to take.”

The anti-poaching pact was hardly Mr. Jobs’s only post-mortem brush with the law. His behavior was at the center of an e-book price-fixing conspiracy with major publishers. After a lengthy trial, a federal judge ruled last summer that “Apple played a central role in facilitating and executing that conspiracy.” (Apple has appealed the decision. The publishers all settled the case.)

Mr. Jobs also figured prominently in the options backdating scandal that rocked Silicon Valley eight years ago. Thousands of options were backdated at both Apple and the computer animation studio Pixar, where Mr. Jobs was also chief executive, to increase the value of option grants to senior employees. An investigation by Apple’s lawyers cleared Mr. Jobs of wrongdoing, saying he didn’t understand the accounting implications. But it concluded that he “was aware or recommended the selection of some favorable grant dates.” Mr. Jobs himself received options on 7.5 million shares, which were backdated to immediately bolster their value by over $20 million. Apple admitted that the October board minutes purporting to approve the grant were fabricated, that no such meeting had occurred and that the options were actually granted in December.

Five executives of other companies went to prison for backdating options, but Mr. Jobs was never charged. (Other Apple executives eventually settled Securities and Exchange Commission charges and left the company.)

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