Jabil circuit sec investigation backdating
Rapp ("Rapp") served as chief operating officer from 2000 through 2002. 73, ¶ 41) Of the .3 million expense, Jabil reported incurring approximately .0 million in 2005 and .2 million in 2003. 73, ¶ 202) The plaintiffs assert in count one that the defendants violated section 10(b) of the Exchange Act and Rule 10b-5. Prior to the enactment of the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley"), a plaintiff was required to bring a section 10(b) claim "within one year after the discovery of the facts constituting the violation and within three years after such violation." , 501 U. 73, ¶ 105(b)) CW5 states that Vetter informed CW5 that "these new options were a replacement for the options that the officers received earlier in 2001 because those options were now `underwater.'" (Doc. To demonstrate falsity and misrepresentation, the plaintiffs also rely on the statement of CW5, who addresses the options granted in only 2001. Lewis ("Lewis") acted as chief financial officer from August, 1999, through September, 2004. 73, ¶ 202) After the plaintiffs instituted the present action, Jabil announced in a Form 8-K filed on March 28, 2007, that Jabil "will record approximately .3 million of aggregate incremental non-cash stock-related compensation charges for the fiscal years 1996 through August 31, 2005." (Doc. 73, ¶ 48(e)) In 2001, Jabil officers received stock options. 73, ¶ 105(a)) Following September 11, 2001, the price of Jabil's stock declined below the exercise price of the options. 73, ¶ 105(a)) CW5 reports that Jabil issued the officers new stock options "in the same exact amounts as the options they received earlier in the year, but at a new, lower strike price." (Doc. The issuance of suspiciously timed options fails to convert the policy representation into a false and misleading statement.Wednesday said its internal investigation of stock option grant practices found no issues of backdating or improper actions. Petersburg, Fla., electronics manufacturing services provider also disclosed the Securities and Exchange Commission is conducting an informal probe of the matter following media reports that the company backdated options.
During the class period, the defendants allegedly represented in public filings the company's policy of applying APB 25 and the company's compliance with APB 25 ("the APB 25 representation").
During the class period, the non-executive stock option committee administered the 19 Plans with respect to employees who were neither directors nor officers. 73, ¶ 81) The non-executive stock option committee allegedly "approved and/or recklessly disregarded the backdating of stock option grants to the Company's employees, causing the Company to materially make false and misleading statements to the public and investors regarding its true financial condition." (Doc. including preparing false reports in the Company's proxy statements, annual reports and interim financial reports that did not disclose the backdating of stock options and failing to properly account for stock option grants in accordance with APB Opinion No. 73, ¶ 76) During the class period, the compensation committee reviewed and established compensation plans, salaries, bonuses, and other officer benefits. 73, ¶¶ 77-78, 129) After fiscal year 2002, the compensation committee assumed the duties of the generally empowered stock option committee. 73, ¶ 85) The complaint alleges which individual defendant served on which committee and at what time. 73, ¶ 210) The plaintiffs allege that the failure to adhere to APB 25 caused the company to overstate earnings. 73, ¶ 209) The plaintiffs allege each defendant repeatedly violated Jabil's internal policy, which required the exercise price of stock options "to be at least equal to the fair market value of shares of common stock on the date of the grant" and which required Jabil to follow APB 25. 73, ¶¶ 10, 130) In a conclusory manner, the plaintiffs allege violations of SEC regulations and Internal Revenue Service ("IRS") rules and regulations. 73 at 145-58) The complaint alleges that "the fact that Jabil revised and restated downward its net income is an admission that the financial statements originally issued were false when they were reported and that the misstatements were material." (Doc. 75 at 9) "To the contrary, plaintiffs contend that the Company's disclosures continued to deny the alleged `truth' even after this action was commenced." (Doc.