Management Toolkit

Former Apple lawyer settles stock-options lawsuit

Tom Krazit CNET News

Published: 15 Aug 2008 10:24 BST

Former Apple general counsel Nancy Heinen has settled with the US Securities and Exchange Commission over charges that she improperly backdated stock options at the company.

The Securities and Exchange Commission (SEC) filed a lawsuit against Heinen last year charging her with cherry-picking grant dates for stock-option awards to Apple executives — including chief executive Steve Jobs — and falsifying paperwork in order to cover up the selection of the favourable dates. Stock-option backdating is legal if properly disclosed, but dozens of companies — including ZDNet.co.uk publisher CNET Networks — in the earlier part of this decade failed to do so, and executives at other companies have gone to prison as a result.

Read this

Photos: Cracking open Apple's iPhone 3G

Investigating the inner workings of Apple's smartphone...

Heinen will pay $2.2m (£1.2m) in penalties and fines to settle the case, without having to admit or deny any guilt in the case, according to Reuters. Her attorney issued a statement following the announcement of the settlement: "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 internal investigation into stock-option backdating at the company in 2006. While it admitted the practice occurred, Apple cleared all current executives of the company, including Jobs, of any wrongdoing. Former chief financial officer Fred Anderson was also sued by the SEC, along with Heinen, but he settled his case the same day it was filed.

Credit: Former Apple lawyer settles options case with SEC from CNET News