Apple settles backdating stock options fraud lawsuit for $20.5mn

The Cupertino, California-based maker of the Mac computers and iPhone, Apple, has agreed to pay $16.5-million in a class action settlement against the company for alleged securities fraud relating to backdating of stock options.

The New York City Employees’ Retirement System brought suit against the company initially in 2006 in a class action, alleging the company unfairly exercised call options that were backdated.

Strike prices are set up to be out of the money, in order for executives to work hard to drive the company stock price up, at which point they could be hugely compensated with the stock options given they could increase shareholder value sufficiently within their term.

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U.S. puts mounting pressure on Chinese monetary policy to encourage floating currency


75th U.S. Treasury Secretary Timothy Giethner under the Obama Administration

The Chinese economy largely relies on exporting manufacturing goods to other economies like to the U.S.

The Chinese government designs its monetary policy to essentially peg its currency, the Yuan, to ensure a stable value that would hedge against appreciation in order to give the country a competitive advantage in the global market place when it comes to exports.

Pegging its domestic currency against a government set policy, instead of allowing the currency to float in the international markets, distorts the real fair value of the currency and continues to help fuel future economic growth in the country from increasing volumes of exports by saturating markets with its cost-competitive goods.

Developed nations, including the United States, have largely criticized Beijing’s monetary policy, arguing it is unfair to nations that allow their currency to float which could cause appreciation.

U.S. Treasury Secretary Timothy Giethner said today at a speech delivered at the Brookings Institution, that there is a dangerous economic threat when nations collude to keep their currencies from appreciating. He went on to say it is unfair to countries that have floating rates, and that nations that keep their currency undervalued could face further challenges as economies they rely on to export goods are saving more and more amid intensifying economic volatility. Additionally, when one nation keeps its currency undervalued, it encourages emerging economies to do the same in order to maximize net exports, at least in the short run.

A new U.S. bill introduced to Congress would add new duties to Chinese-made goods, effectively making them more expensive.

The new legislation would only apply to goods deemed unfairly priced relative to domestic substitute goods manufactured in the U.S.

Ahead of the last G20 meet, which took place in Toronto, Canada, Beijing said it would make changes to its policies that should see at least some marginal appreciation of its currency.

To date, that has not happened, and the Yuan is believed to be undervalued by about 40-percent.


For business’ sake, Gov’t surveillance law must be reformed

Editor’s note: This is a guest post by Mark Stanley and Harley Geiger from the Center for Democracy & Technology (CDT), a non-profit public interest organization based in Washington, DC. CDT’s mission is to keep the Internet open, innovative, and free. For more on ECPA reform visit CDT’s Wiretap/ECPA page.

“One who does not wish to disclose his movements to the government need not use a cellular telephone.” – DoJ reply brief, page 12

Last week, both the Senate and House held hearings on reforming the Electronic Communications Privacy Act (ECPA). Passed in 1986, ECPA specifies rules for government access to email, text messages, and other digital communications. At the time ECPA was written, Congress wanted to protect then-emerging Internet services from inappropriate government access so people would trust the services enough to make them commercially successful.

Of course, a lot has changed in 24 years, and the law is in serious need of reform. ECPA, for example, provides no clear standard for the government’s ability to track our movements. Cell phones, increasingly indispensible to modern life, broadcast the location of their owners every few seconds. This location information is recorded and is more easily available to law enforcement than one might think.

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Apple iPhone could come to Verizon in 2011 with new LTE network

Apple’s popular iPhone smartphone has been sold exclusively through the telecom AT&T in the U.S. since the very first generation of the device that launched about five years ago.

Five years later, the latest iPhone 4 is still only available on the AT&T network in the United States, but that could change as soon as next summer.

Apple has not built an iPhone that supports the CDMA network standard, the same standard used by the biggest telecom in the United States, Verizon.

Verizon chief executive Mr. Seidenberg told investors today that his company had no plans to launch Apple’s iPhone 4 in the near future, but expressed his favor of carrying the iPhone in the future.

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Starbucks price hikes coming as raw materials costs spike

The Seattle-based premium coffee brewer, Starbucks, has announced it would raise prices of already aggressively priced coffee beverages.

The company says variable costs, in particular, raw materials, have seen significant price increases over the last decade, with some key ingredients like green arabica coffee trending upward to a 13-year high.

Starbucks also noted dairy, sugar, and cocoa as other primary raw materials that have materially increased in costs.

Starbucks CEO Howard Schultz said in a statement today that the company absorbed the higher costs in the past, but would now have to shift the costs to consumers given the upward trend and continued volatility.

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Where Should Average Investors Invest in this Uncertain Market?

Editor’s note: This is a guest post by Michael Trinkle from ForexTraders, an online web resource about finance, investing, and analysis.

As market pundits continue to debate the latest movements of the market or lack thereof, the average investor remains hard pressed to find the best place to put his hard earned capital. Market uncertainty, brought on by an election year and debt problems in Europe, has soured consumer optimism and dampened his will to invest. The “flash crash” in May and the finger pointing that ensued over trading practices of hedge fund managers have done nothing to increase an average investor’s confidence either.

The government continues to search for causes for the sudden drop in market prices last May, but no answers have been forthcoming, leading many investors to believe that the system is rigged. A new AP-CNBC survey shows that “61 percent said the market’s recent volatility has made them less confident about buying and selling individual stocks. And the majority of those surveyed, 55 percent, said the market is fair only to some investors.”

Another study suggests that investors have done more than talk about their concerns. They have moved their funds out of equities. “From January 2008 through July 2010, investors pulled a net $244 billion out of stock mutual funds. While all that cash was flowing out of stocks, investors put nearly $589 billion into bond funds over that 31-month period.”

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IBM to acquire business analytics firm OpenPages

ibmIBM today announced it would acquire the private business analytics company OpenPages, with financial terms of the deal being kept confidential.

OpenPages currently has about 200 clients, and provides them with complex governance risk and compliance software to allow those firms to identify and manage enterprise-wide risks across functional areas, including operations, in one system.

The software lets firms create a strategy with specified goals around many functional areas, including around finance and receivables, cash flow, and sales (even segregated in geographical areas, including other segments), among other functions.

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Gartner forecasts Android to overtake RIM’s BlackBerry this year

The influential business IT market research and analysis firm, Gartner, published a report today about mobile cell phone sales, predicting Ontario’s Research In Motion (RIM), the maker of the popular enterprise centric smartphone, would lose its spot as the second largest phone maker this year.

Gartner noted intensifying competition from Google’s Android mobile operating system, and Apple’s iPhone.

Google Android is expected to edge RIM out of the second spot as more handsets are expected to ship with Google’s OS.

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eBay’s stake in Craigslist restored following victorious court ruling

ebayThe world’s largest online auction website, eBay, just announced late this afternoon that a Delaware Court ruled in favor for the company in a lawsuit that involved the dilution of its investment in rival company Craigslist.

The lawsuit was initiated in 2008, and alleged majority Craigslist stockholders, and the company founders Mr. Buckmaster and Mr. Newmark, unlawfully undertook transactions that unfairly diluted eBay’s minority share in Cragslist.

eBay Inc. made an initial investment in the classifieds giant in August of 2004, although the terms of the deal were not disclosed, other than the fact that eBay earned a marginal 25-percent stake in the company after buying out the shares of an exiting executive.

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3PAR accepts Dell’s $1.6B takeover offer, urges stockholders to accept

Update: HP Corp. has made a higher offer for 3PAR this evening, beating out the latest offer of $24.30 per share ($1.6-billion valuation)  from Dell. HP is offering $27 per share in an all cash deal, valuing 3PAR at $1.8-billion. HP says it has the capital to make the acquisition and it has already been approved by the board.

3Par Corporation has announced today they have agreed to Dell’s increased bid to acquire the company for $24.30 per share, valuing the acquisition price at $1.6-billion, net of cash.

The 3Par stock (NYSE:PAR) has traditionally traded with low variability, until August 16 when the price jumped from under $10 per share to $18 per share, and only five days later propelling up to $26 per share as a takeover agreement was imminent and the acquisition offers were considered fair going forward.

Under the tender offer deal, there is still a small likelihood that the acquisition could still fall through, as Dell has options to forego the acquisition, but the company would have to pay a $72-million termination fee as per the amended acquisition agreement that reflects the new bid price.

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