Former Apple Attorney Settles with the SEC

Former Apple Attorney Settles with the SEC

Apple’s long-festering stock-option backdating scandal may finally be put to rest: former Apple general counsel Nancy Heinen has settled with the SEC for $2.2 million. Back in April 2007, Heinen and former Apple CFE Fred Anderson were sued by the SEC for fraudulently back-dating sizable stock options grants to Apple executives—including Apple CEO Steve Jobs. Although options back-dating isn’t illegal, its real impact on a corporation’s bottom line must be disclosed. The SEC’s suit alleged company records were altered to conceal the impact of the backdating.

Former CFO Fred Anderson settled with the SEC the same day the suit was brought, paying $3.5 million and admitting no wrongdoing. He is currently a managing director of private equity outfit Elevation Partners, best known for its association with U2 lead singer Bono and selling Bioware and Pandemic Studios to Electronic Arts.

In her settlement, Heinen neither admitted to nor denied the charges in the SEC suit, but will pay $2.2. million in disgorgement, interest, and penalties, and will be barred from serving as an officer or director in a public company for five years. In a statement issued through her attorney, Heinen said "I cherish the great people I worked with at Apple, and I am proud of my contributions to its historic turnaround and current success. With this lawsuit behind me, I look forward to addressing the greater challenges of social justice and economic disparity."

Apple conducted an extensive internal investigation in 2006 to investigate options backdating, and found that while backdating had happened, its executives weren’t involved in any wrongdoing. In late 2006, the company restated some $84 million in financials owing to options backdating.

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