Jobs Well Done?
Not likely, says an April 22 report in the San Jose Mercury News, which says it examined the backdated stock options grant to Apple CEO Steve Jobs and found "scant evidence, if any, to support criminal charges against the Silicon Valley icon."
"Despite Apple's disclosure that Jobs approved widespread backdating at Apple, there is no evidence he directed the backdating of his own grant or covered it up afterward, based on a review of regulatory filings and interviews with lawyers intimately familiar with the grant who asked not to be identified."
As Carolyn Elefant wrote here yesterday, that appeared to leave Jobs above the fray. But that was before the SEC announced that it had filed charges against former Apple GC Nancy R. Heinen and settled charges against former CFO Fred D. Anderson. (Here is the SEC's complaint.) And that was before Anderson, SEC settlement in hand, turned and pointed the finger at Jobs. A statement issued by Anderson's attorney Jerome Roth says:
"Fred was told by Steve Jobs in late January 2001 that Mr. Jobs had the agreement of the Board of Directors for the Executive Team grant on January 2, 2001. At the time Mr. Jobs provided Fred this assurance, Fred cautioned Mr. Jobs that the Executive Team grant would have to be priced based on the date of the actual Board agreement or there could be an accounting charge.
"He further advised Mr. Jobs that the Board would have to confirm its prior approval in a legally satisfactory method. He was told by Mr. Jobs that the Board had given its prior approval and the Board would verify it. Fred relied on these statements by Mr. Jobs and from them concluded the grant was being properly handled."
These developments appear to leave Apple, the company, home free, writes Roger Parloff at Fortune's Legal Pad blog, and lay the bulk of the blame on Heinen.
"Not far from the San Andreas Fault, a new fault line opened up in Silicon Valley yesterday — one that residents are actually thrilled to have discovered. We’ll call it the It’s All Nancy Heinen’s Fault."
But Jobs' status remains clouded, Parloff says.
"The cloud over Jobs stems from the written statement released by Anderson’s lawyer yesterday, which says that Anderson explained to Jobs the accounting implications of backdating in January 2001, at the time Jobs was backdating a 4.8 million-share grant to the company’s executive team, and 11 months before Jobs himself was granted 7.5 million backdated options."
And after reading the SEC complaint, Parloff is not sure he is happy with laying all the blame on Heinen. Meanwhile, as the U.S. Attorney's Office continues to investigate the case, one former SEC general counsel tells Associated Press that the combination of Anderson's accusations and the pending investigations leave Jobs' culpability in question. Ralph C. Ferrara, now a partner with LeBoeuf, Lamb, Greene & MacRae in New York, tells AP technology writer May Wong:
"That statement and the disposition of the SEC does leave Steve Jobs in legal limbo. It leaves him not knowing if he'll be swept up in heaven with Apple or cast into hell."
Will investigators ever get to the core of Apple's backdating scandal? Will Jobs be fully vindicated? For now, the only answer is: Stay tuned for further developments.
Posted by Robert J. Ambrogi on April 25, 2007 at 05:41 PM | Permalink
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