The Securities and Exchange Commission is expected to file securities-fraud charges almost immediately against two former Apple executives including general counsel Nancy Heinen in connection with her role in the backdated-options controversy at Apple. The move against the two would be the first result of separate investigations into Apple’s options practices by the commission and the Justice Department. In the meanwhile, it is reported that the second executive, Apple’s ex-chief financial officer Fred Anderson, has settled case with the US Securities and Exchange Commission on his alleged participation in the backdating of stock options.
Anderson has reportedly agreed to a fine of about $150,000 and to repay option gains of about $3.5 million to settle claims that he filed false financial reports and had inadequate accounting controls at the Cupertino, California-based company but will not admit to any unlawful activity. On the other hand, lawyers for Apple’s former General Counsel Nancy Heinen have said that she is expected to be sued this week for allegedly backdating an Oct. 19, 2001, stock option grant to Jobs for 7.5 million shares, and an earlier grant made to Jobs’ executive team members.
Apparently Heinen is facing the more serious charges than Anderson. The SEC lawsuit is likely to accuse her of having played in role in granting false dates for two options grants, an October 2001 date for a grant to Jobs, and the January 2001 date for the grant to the company’s top executives, which included both Anderson and Heinen. Whereas, the case against Anderson involved only the January 2001 grant, and does not allege that he pulled out the falsely recorded date, however, it notes that as chief financial officer he was copied on e-mail messages that discussed the dating.
Giving clean chit to Steve Jobs Apple in its official statement said that its investigation, led by directors including former vice president Al Gore, found that Jobs knew about the backdated options. But he did not benefit financially from the grants and did not understand the accounting implications.
In the meanwhile, Heinen’s attorneys have accused that regulators are making Heinen a scapegoat for hearing among the thousands of executives ‘who’ve been swept up in this stock-option-grant-timing issue.’ In addition to it, interestingly Apple’s own accounting policies at that time did not make illegal moving the grant date to a later date and higher price, which Heinen’s attorneys contends occurred in these two instances.
