Apple Cored Over Fake Documents
By: David Utter
An investigation into inappropriate option granting practices at Apple Computer has yielded evidence of falsified documents, crafted to provide maximum profits to their recipients.
The SEC, the Department of Justice, or both may figure very publicly in Apple's future. An internal investigation of problems with stock option grants at Apple turned up some damning evidence " documents faked to deliver more lucrative options to the grantees.
The Recorder report that appeared at Law.com said the investigation has the attention of criminal and civil investigations. It also raised the possibility of Apple's founder Steve Jobs, as iconic as his company, being removed from his CEO role for these misdeeds.
A couple of potential focal points for investigators could be a pair of Apple executives, both of whom are no longer with the company:
Apple spokesman Steve Dowling wouldn't comment beyond what is in the public filings. But individuals with knowledge of the case said those ex-officers are Nancy Heinen and Fred Anderson, the company's former general counsel and chief financial officer, respectively.
Heinen departed the company last spring -- before the options scandal blew up -- and sources familiar with her situation said the departure was the result of a tiff with CEO Steve Jobs unrelated to options. Reached last week, Heinen lawyers Cristina Arguedas and Miles Ehrlich wouldn't discuss their client.
Anderson, who retired as CFO in 2004, was an Apple board member until he resigned in October. His lawyer, Jerome Roth of Munger, Tolles & Olson, declined to comment on his client's situation.
Jobs has likewise retained counsel to handle the ministrations of DOJ and the SEC. Fallout from the news has started already, in advance of Apple's scheduled 10-K SEC filing, where a restatement of earnings would appear.
Shares of Apple have dropped 69 cents to 80.82 as of press time. They had touched a low of 76.77 in trading before beginning a rebound.
Jobs' fate after Apple's 10-K filing will be a matter of great interest to the tech and investment communities. We think one possible scenario could have him shift to a 'chief software architect' role, like Ray Ozzie's at Microsoft, while another person takes the CEO duties in the wake of the filing to reassure jittery investors.
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