Menu
Apple's 'options' lawyer indicted

Apple's 'options' lawyer indicted

The US Securities and Exchange Commission has charged former Apple general counsel Nancy Heinen of fraudulently backdating stock options, the agency said on Tuesday.

Heinen helped backdate options given to Apple's top officers, causing the company to under-report its expenses by almost US$40 million, according to the SEC.

The agency filed similar charges against Apple's former chief financial officer, Fred Anderson, but simultaneously settled that case. Anderson will pay $3.5 million in penalties in response to SEC charges that he should have noticed Heinen's actions and corrected the company's financial statements, the SEC said.

Despite the charges against those employees, the SEC said that Apple itself was in the clear. The commission praised Apple for its "swift, extensive and extraordinary cooperation" in the investigation, including prompt self-reporting, an internal investigation, sharing the investigation results with the government and implementing new controls to prevent future fraud.

In a response to the SEC case, Anderson's attorney has blamed the backdating on Apple CEO Steve Jobs. Anderson had "cautioned" Jobs that backdated options had to be approved by the board of directors, and relied on Jobs' assurances that had happened, said Anderson's attorney Jerome Roth in a statement released Tuesday.

In one instance that occurred in February 2001, Apple granted 4.8 million options to six executives including Heinen and Anderson. To avoid reporting an $18.9 million compensation charge, Heinen backdated the options to January 17 when the company share price was much lower, the SEC said. She then told her staff to prepare false documents showing the board of directors had taken action on the stock option grants that day. Anderson colluded by failing to disclose her actions to Apple's auditors, or ensuring that Apple's financial statements were correct, the SEC said.

Later, in December 2001, the company granted 7.5 million options to Jobs. Again, Heinen avoided a $20.3 million charge by drafting minutes for a fake board meeting she said happened on October 19, the SEC said. That meeting had never occurred.

Both Heinen and Anderson personally received millions of dollars in unreported compensation through the backdating, the SEC said in its case.

In its lawsuit, the SEC is seeking a penalty payment and refund of those profits from Heinen, as well as an order barring her from serving as an officer or director of any other public company.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Applesteve jobs

Featured

Slideshows

Meet the leading female front runners of the Kiwi channel

Meet the leading female front runners of the Kiwi channel

Reseller News honoured the leading female front runners of the New Zealand channel at the 2018 Women in ICT Awards (WIICTA) in Auckland. The awards honoured standout individuals across seven categories, spanning Entrepreneur; Innovation; Rising Star; Shining Star; Community; Technical and Achievement.

Meet the leading female front runners of the Kiwi channel
Meet the top performing customer-centric Microsoft channel partners

Meet the top performing customer-centric Microsoft channel partners

Microsoft honoured leading partners across the channel following a year of customer innovation and market growth in New Zealand. The 2018 Microsoft Partner Awards recognised excellence within the context of the end-user, spanning a host of emerging and established providers.

Meet the top performing customer-centric Microsoft channel partners
Reseller News launches new-look Awards at 2018 Judges’ Lunch

Reseller News launches new-look Awards at 2018 Judges’ Lunch

Introducing the Reseller News Innovation Awards, launched to the channel at the 2018 Judges’ Lunch in Auckland. With more than 70 judges now part of the voting panel, the new-look awards will reflect the changing dynamics of the channel, recognising excellence across customer value and innovation - spanning start-ups, partners, distributors and vendors.

Reseller News launches new-look Awards at 2018 Judges’ Lunch
Show Comments