Former Apple CFO settles with SEC
By Michael Kahn 2 hours, 3 minutes ago
SAN FRANCISCO (Reuters) - Apple Inc.'s (Nasdaq:AAPL - news) former finance chief settled with U.S. regulators on Tuesday over backdated stock options grants, saying he had relied on statements by Chief Executive
Steve Jobs in handling the grants at the company.
The U.S.
Securities and Exchange Commission said it would not pursue action against Apple after reaching a settlement with former Chief Financial Officer Fred Anderson and filing charges against former General Counsel Nancy Heinen.
Anderson agreed, without admitting or denying the allegations, to pay about $3.5 million in fines and disgorgement of profits.
In a statement issued by his lawyer, Anderson said he warned Jobs about an executive stock option grant in January 2001, saying the grant would have to be priced based on the date of the actual Apple board agreement.
"He was told by Mr. Jobs that the Board had given its prior approval and the board would verify it," the statement from Anderson's lawyer, Jerome Roth, said. "Fred relied on these statements by Mr. Jobs and from them concluded the grant was being properly handled."
In its suit against Heinen, the SEC accused her of also participating in fraudulent backdating of stock options granted in 2001 to Jobs and other senior executives.
Heinen's lawyer said in a statement it was unfair to single his client out for enforcement action among executives in more than 170 companies swept up in a stock option scandal.
"To suggest that Ms. Heinen engaged in fraud is to misunderstand the facts of what happened," Miles Ehrlich said in a statement. "Nancy did not backdate stock options, and she didn't deceive anyone either inside or outside the company."
Apple, the maker of the popular iPod digital music players and
Macintosh computers, is among dozens of companies under scrutiny for their accounting of stock options granted to executives. The company said in December it would take an $84 million charge for improperly dating more than 6,400 stock options.
The main issue for many companies is whether they improperly dated stock options grants to take advantage of a temporary decline in the underlying share price.
The SEC complaint alleges Heinen lied to auditors, created false documents -- including one from a board meeting that regulators charge did not occur in 2001 -- and circumvented company controls.
But the agency also said it would not file an enforcement action against Apple in connection with its stock options investigation, citing the company's "extraordinary" cooperation.
"Apple's cooperation consisted of, among other things, prompt self-reporting, an independent internal investigation, the sharing of the results of that investigation with the government, and the implementation of new controls designed to prevent the recurrence of fraudulent conduct," the SEC said in a statement.
Apple shares were up 0.6 percent at $94.08 in afternoon trading on Nasdaq.
(Additional reporting by Nichola Groom in Los Angeles, Julie Vorman in Washington and Duncan Martell in San Francisco),