We can all agree that granting people stock options that can't lose — as Apple and lots of other (often high-tech) outfits did Not Long Ago — at least feels wrong. But who knew that accounting for them in the wrong way could expose you to a suit by the Securities and Exchange Commission?
Blawgletter surely did not know. As far as you know. But surely the chief financial officer of a public company should have known that, right?
Yet we want to tell you about something else. We desire to let you know that an Annual Report on Form 10-K, the Ninth Circuit held today, can come into evidence under the business records exception to the hearsay rule to help persuade a jury that, yes, you (as CFO) messed up in how you accounted for those stock options that your firm back-dated. Even though the 10-K came out long after you left. And in spite of the fact that the parts the SEC used against you dealt with the results of a series of judgments about pretty complex stuff (like generally-accepted accounting principles). Securities and Exchange Comm'n v. Jasper, No. 10-17064, slip op. 5159-64 (9th Cir. May 15, 2012).