Federal Authorities Intimidated By Black Turtleneck & iPhone? Investigating Grants To Jobs But Not Jobs Himself?

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The Wall Street Journal this morning reports that the feds are investigating Apple's backdated stock options grants to Steve Jobs. The way the story reads, however, makes it sound as if the investigators are reading from the script that Al Gore and Steve Jobs wrote: no wrong doing by current management--all the backdating miscreants are formers. You know, former attorneys for Apple. Former financial offers. Formers.
But can Jobs really escape further scrutiny? Apple itself has admitted that Jobs personally recommended favorable dates for some stock options grants, although not the grants that he received. Have the feds adopted the Apple standard of guilt? If so, this will be news to us. In the past, the feds have indicated that direct self-dealing was not sole the test for criminality of backdating, and that the benefit to executives from employee retention through backdated grants crossed the line. We're not saying we want the feds to go after Jobs but we're sure there are quite a few executives out there who are scratching their heads over what appears to be the Jobs Immunity Defense to backdating.

Investigators are now focusing on the grant to Mr. Jobs for 7.5 million options that were finalized in December 2001, when Apple's share price was higher. The false dating increased the value of the grant to Mr. Jobs, and resulted in a retroactive $20 million charge to Apple's earnings when it was discovered by a special internal investigation.
People familiar with the matter say the false documentation was created by an Apple attorney named Wendy Howell, whom the company quietly dismissed last month. Ms. Howell contends that Apple's general counsel at the time, Nancy Heinen, instructed her to create the false documentation, these people say. Thomas Carlucci, Ms. Howell's attorney, said that while at Apple "Ms. Howell acted as instructed by Apple management and with the company's best interest being paramount."
Ms. Heinen left Apple in May for reasons that were unrelated to backdated options, a person familiar with the matter says. Her attorney, Cristina C. Arguedas, says Ms. Heinen didn't knowingly engage in any wrongdoing and denies she instructed Ms. Howell to falsify documentation. Ms. Arguedas said in a statement that "each of the option grants involving Ms. Heinen was authorized and approved by her superiors."


U.S. Scrutinizes Grant to Jobs
[Wall Street Journal]

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