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Will SEC:s investigation darken the world of Apple? April 24, 2007

Posted by John in Technology.
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So today – the same day Apple is to announce its quarter results – Howard Mintz at San Jose Mercury News brakes the news that the Securities and Exchange Commission, SEC, this week will bring its first legal action in the Apple backdating probe. In the limelight is Apples former General Counsel Nancy Heinen and her her alleged role in backdating options in 2001 – options that shifted to CEO Steve Jobs among others.

The buzz is big since its about Apple and Steve Jobs. The question is: How will the investigation affect Apple (who seems to be surfing on an eternal wave of hits with iPod, iTunes and soon to come iPhone and iTv)? What is Steve Jobs role in the drama?

In New York Times John Markoff and Eric Dash writes that the investigations have “cast a cloud over the company even at the height of its iPod-driven renaissance”.  They also note that after Apples own investigation late last year the company cited “serious concerns” but absolved Steve Jobs of any responsibility. At Wireds Cult of Mac-blog Mat Honan points out that the news on legal action comes just a day after reports from the San Jose Mercury News claiming Steve Jobs will not be charged.

So is Nancy Heinen being a scapegoat? Her lawyer states to San Jose Mercury News that Heinen broke no laws and only took steps approved by Apple’s directors. At SiliconValleyWatcher Richard Koman writes that the SEC is looking into Heinen’s role in awarding Steve Jobs stock options but also at a second round of grants in which various executives, including Heinen herself, profited from backdating.

At Between the Lines Larry Dignan sums up the (non-)effect on Apple: “There is no sign of damaging information against Apple CEO Steve Jobs… However, given the behavior of Apple’s stock there wasn’t a lot of worry anyway,” he writes adding that its time to go back to your regularly scheduled iPhone speculations.

At Ars Technica Justin Berka writes that it’s important to note that SEC:s charges aren’t criminal charges—only securities fraud charges. But they are still a fairly big deal, as getting in trouble with the SEC isn’t a good thing… “Given that Heinen was the general counsel, I would expect her to be familiar with the rules; and after the Enron and related scandals, I suspect that both defenses won’t hold very much weight with the SEC,” he adds.

This afternoon will be interesting. We’ll certainly keep our eyes (and ears) on the earnings call conference and the stockmarket.

By John Furrier and Tina Magnergard Bjers

Comments»

1. Apple saved by record earnings? « PodTech Network - April 27, 2007

[…] investigation into what really happened when the options were backdated in 2001 – something we commented on earlier this […]


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