| | Apple Former General Counsel Is Charged in Options Scheme...
By SIOBHAN HUGHES
The Wall St Journal
April 25, 2007
WASHINGTON -- The U.S. Securities and Exchange Commission on Tuesday charged the former general counsel of Apple Inc. with participating in the fraudulent backdating of options to Chief Executive Steve Jobs and other executives in 2001, and with altering company records to conceal the fraud.
The SEC accused Nancy Heinen, the former general counsel, of participating in the scheme, alleging it caused the company to underreport its expenses by almost $40 million.
Apple's former chief financial officer, Fred Anderson, separately agreed Tuesday to pay $3.5 million to settle charges that he should have noticed Ms. Heinen's efforts to backdate one big grant in February 2001 to members of Apple's executive team.
Their attorneys couldn't immediately be reached for comment.
"Apple's shareholders relied on Heinen and Anderson, as respected legal and accounting professionals, to ensure the accurate reporting of the company's executive compensation," Marc Fagel, the associate regional director of the SEC's San Francisco office, said in a statement. "Instead, they failed in their duties as gatekeepers and caused Apple to conceal millions of dollars in stock option expenses."
The Wall Street Journal earlier reported the settlement with Mr. Anderson and the possible charges involving Ms. Heinen.
The SEC actions suggest the saga over improperly dated stock options at Apple -- one of the highest-profile ones among more than 140 companies caught up in the backdating scandal -- is entering a new phase almost a year after the company first disclosed problems related to past option grants.
In December, after the completion of its internal probe, Apple cleared Mr. Jobs of any misconduct, saying he was unaware of the accounting implications of backdated grants and didn't financially benefit from them because he never exercised his options. The company did say, however, that Mr. Jobs recommended "favorable" dates for some stock-option awards.
In addition to the SEC, the U.S. attorney's office in San Francisco is probing the Apple options matter. A spokeswoman at the U.S. attorney's office in San Francisco declined to comment.
Stock options typically give an employee the right to buy a company's shares in the future at the market price on the date the grant is approved. Backdating involves pretending a grant was given at an earlier, more beneficial time, when the market price was lower.
--Nick Wingfield and Steve Stecklow contributed to this article
Write to Siobhan Hughes at siobhan.hughes@dowjones.com |
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