Judge Again Rebuffs NYC Fund's Attempt to Sue Apple

May 22, 2008 (PLANSPONSOR.com) - The New York City Public Employees' Retirement System has lost a second attempt to sue Apple Inc.

The Sun  newspaper said the city tried to refile a suit over stock options backdating at the company based on different claims under the Securities Exchange Act.   A U.S. District Court Judge in California last year ruled that the pension fund could not sue Apple for damages because it did not suffer any harm; the pension fund had profited from its shares of Apple stock, according to The Sun.

This time the judge decided NYCPERS could not come back with different charges. He said the pension fund “made a strategic decision” to only pursue some claims in the first suit and that allowing the city to add new claims would “run counter to well-established” precedent and impose a “financial burden to Defendents,” according to the news report.

The sweeping stock options probe by the Securities and Exchange Commission (SEC) led to legal actions against executives and counsel at many companies. In December 2006, after completion of an internal probe, Apple cleared CEO Steve Jobs of any misconduct, saying he was unaware of the accounting implications of backdated grants and did not financially benefit from them because he never exercised his options (See Apple CEO Aware of Some Stock Option Grants ). Apple Inc.’s former chief financial officer Fred Anderson settled with the SEC over allegations he was involved in backdating stock options (See Report: Ex-Apple CFO Works Out Backdating Allegations ), and former General Counsel Nancy R. Heinen was charged in the scheme (See SEC Charges Heinen in Apple Backdating Scheme ).

The options backdating scandal also resulted in numerous shareholder lawsuits (See United Health Options Backdating Suit Gets Class Action Status ).