Former Vice President Al Gore, an outside director of Apple Computer Inc., chaired a committee which recently cleared several Apple executives, including Steve Jobs, of any wrong doing in a recent scandal over Apple’s stock-options practices.

Stock options have come under scrutiny following concerns over the practice of back dating options. Back dating is common practice among many companies. It involves changing the grant date of options to a date on which the stock price is lower. Options work by giving the holder an “option” to buy the stock at a specific price, called a strike price, after a certain period of time has passed. Usually the great the difference between the price at the time of the granting of the option and the price at the time the option is exercised (used), the more money the option holder makes.

Does this sound convoluted? It is. That is the reason there is so much scrutiny over the practice. There is a large gray area in this type of transaction that allows for mistakes and just plain fraud.

Aplle is one of the several hundreds of companies that is being investigated for such practices. Apple created a special committee, chaired by Al Gore, to perform an internal investigation. The probe cleared most of Apples top executives including Steve Jobs. However, the committee found that two former officers may have committed some questionable actions in regards to accounting for the options.

Backdating as stated previously is not illegal but it is difficult to account for and proper reporting of the practice must made.

Apple has restated earnings and reported the backdating activity. However the company is still under investigation by the SEC. Also executives have just been cleared by Apple but are still liable for any criminal or civil charges that may spring from any investigation.

According to Piper Jaffray analyst Gene Munster:
“Apple has issues with stock options but I don’t think it matters unless Steve Jobs is impacted,” . “I think Wall Street could care less about this. They’ve already got two fall people, Nancy and Fred, and what it comes down to for investors is how many iPods they sold in the December quarter.”