Associated Press, "Investors react negatively to Apple disclosure; Need to restate earnings over stock options issues drive shares down"

          As the stock option cloud over Apple Computer Inc. darkened, investors tried to determine Friday whether the company’s popular products are powerful enough to overcome the potential accounting and legal risks facing the maker of the iPod and the Macintosh.
          The possibility that the improper handling of employee stock options might erase some of Apple’s past profits or, even worse, plunge its renowned CEO, Steve Jobs, into a legal morass spooked some investors.
          Friday’s backlash against Apple wasn’t as a severe as Wall Street’s treatment of several other companies that have recently raised doubts about the accuracy of their past financial statements because insiders mishandled stock option awards.
          More than 80 other companies nationwide are entangled in the stock option imbroglio. But Apple’s ubiquitous brand makes it stand out from the rest of the pack. “Many will be watching this case because ... Apple may be the closest to a household name,” predicted former federal prosecutor Michael Koenig, who is now in private practice in Washington, D.C.

Learn more about the stock options mishandling litigation.