Print 9 comment(s) - last by OddTSi.. on Apr 25 at 4:00 PM

SEC closes in on two former Apple executives

DailyTech previously reported Steve Jobs will likely not be indicted by the Securities and Exchange Commission relating to a backdating scandal.  However, the SEC today filed legal action against two former top-level Apple executives -- chief financial officer Fred Anderson and former Apple general counsel Nancy Heinen, both accused of violating securities fraud laws.  They are allegedly responsible for backdating a 2001 stock option grant that allowed Jobs to receive 7.5 million shares.

The SEC believes Heinen allowed the backdating, but Anderson did not attempt to stop any illegal activities. In an official statement, Anderson said the backdating in 2001 was led by Jobs -- an announcement that severely damages Jobs' defense of saying he didn't know about the backdating accounting.

Anderson also filed a settlement with the SEC that will force him to pay up to $3.5 million in fines, but let him escape liability of the incident.

Heinen unexpectedly resigned from the company in May, two months before Apple unveiled an internal investigation into the backdating.  Her attorneys are claiming she is the scapegoat in the Apple investigation.  Heinen said that she will fervently fight the SEC charges.

The internal Apple investigation "raised serious concerns regarding the actions of two former officers in connection with the accounting, recording and reporting of stock option grants," Apple reported in a December 2006 SEC filing.

It is unknown if the SEC will file any more charges against individuals who were involved with the case, but Apple itself is in the clear.

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So basically
By FITCamaro on 4/24/2007 5:46:01 PM , Rating: 2
Jobs is guilty but the other two are getting to take the fall.

And in other news, Jobs announced a new product today called iGuilty.

RE: So basically
By OblivionMage on 4/24/2007 6:45:11 PM , Rating: 1
I don't really see how Jobs isn't implicated in this...

RE: So basically
By OddTSi on 4/24/2007 7:03:29 PM , Rating: 2
Lack of evidence. From what little I've read about this he's basically pleading ignorance in the matter. Yeah, apparently a CEO isn't capable of figuring out why his stock options are worth hundreds of millions of dollars more than they should be.

Obviously it's BS, but they can't prove it so he'll likely get off cleanly and let these two take the fall for him.

RE: So basically
By vanka on 4/24/2007 7:32:02 PM , Rating: 2
I'm not anti-corporation; I don't start foaming at the mouth when I see them make huge boat loads of cash like some people do. But what really pisses me off is when they start breaking the law and then lie about it. In essence: I don't care if you win as long as you don't cheat. What really gets me is the the high level execs (especially the CEO) start claiming ignorance of the illegal activities of the corporation. If the CEO doesn't know what's going on in his/her company; why the hell are they getting thousands (millions) a year to run the company. Do they get paid just to come in and veg the whole day? I understand that a CEO won't know every tiny detail of the workings of the company; but I doubt that it's the case in this situation.

RE: So basically
By OddTSi on 4/25/2007 4:00:52 PM , Rating: 2
Same here. I would define myself as a capitalist. I see nothing wrong with a CEO making millions if he's earned it. Like you said though, when they haven't earned it or when they're cheating the system, that's when I get pissed off.

With regards to Jobs' case, it's not that this was going on within his company in a department that he didn't have direct supervision over, this happened with HIS stock options. There's no way a CEO who understands all the ins-and-outs with all of these things wouldn't realize there was something fishy with his stock options (IF in fact you believe his story that he didn't have anything to do with it and these two just felt like making him more money).

RE: So basically
By feelingshorter on 4/24/2007 8:11:50 PM , Rating: 2
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.

QFT from the WSJ. So this is to say that Steve never gained money from the stock options. So thats probably why it was hard to prove he did anything wrong.

By melgross on 4/25/2007 12:52:10 AM , Rating: 3
Such feeling!

You guys are really something. Pay no attention to the facts, just what you want to believe, right?

Jobs never denied he approved some of the backdated grants. But he never approved his own dates. It's pretty clear what happened there.

Backdating is not illegal. Only improperly accounting for them is.

Read some better reporting. This article is crap.

More information on this
By crystal clear on 4/25/2007 3:17:25 AM , Rating: 2
In an official statement, Anderson said the backdating in 2001 was led by Jobs -- an announcement that severely damages Jobs' defense of saying he didn't know about the backdating accounting.

Expect more information as the justice department is still investigating options backdating at Apple -

Steve Jobs, chief executive of Apple, was warned in 2001 about the accounting implications of backdating stock options for top executives at the company, Apple’s former chief financial officer said on Tuesday

In a statement circulated by his lawyers, Mr Anderson alleged that he had received assurances from Mr Jobs in late January 2001 that an options grant to several members of Apple’s top management team had been approved by Apple’s board on January 2. That was two weeks before the January 17 grant date specified in Apple’s company filings.

Mr Anderson “was told by Mr Jobs the board gave its prior approval and the board would verify it”, Mr Anderson’s lawyers alleged.

“Fred relied on these statements by Mr Jobs and from them concluded that the grant was being properly handled. It now appears that the board may not have given the necessary prior approval to the grants.”

Mr Anderson also said he “understood” Mr Jobs and Ms Heinen selected the grant date.

Steve Jobs
By balofur on 4/24/2007 6:23:11 PM , Rating: 1
How much money has Steve Jobs given to less fortunate ones?

If he continues to only value accumulating money (illegally)he will lose all of the creative genius he had as a young man when he brilliantly "invented" the PC.

“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads
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