Google Inc senior director Ann Mather is facing a potential legal battle with the US Securities and Exchange Commission (SEC) for alleged stock options abuses that occurred during her tenure as CFO at Pixar Animation Studios.

According to documents filed by the SEC yesterday, Mather, who joined the Google board in November 2005, is accused of "violation of federal securities laws related to certain stock option transactions" when she oversaw the Pixar books between 1999 and 2004.

Google was quick to disclose that its director faced a possible nasty legal spat with the SEC. The internet search engine giant’s chairman Eric Schmidt, in a show of togetherness, said that the firm supports Mather’s re-election to its board at Google’s annual meeting next week.

"We have the utmost confidence in Ann's integrity as well as her abilities as a director," said Schimdt in a statement.

The SEC told Mather, who currently chairs Google’s audit committee, that staff at its Los Angeles agency will recommend a civil complaint be filed against her for alleged mishandling of stock options at Emeryville-based Pixar, which was bought by Walt Disney Co. in 2006.

Last year Disney admitted that some of Pixar’s stock options had been rejigged, but said no one currently associated with the company – including Apple boss Steve Jobs, who serves on the firm’s board – was guilty of improper backdating.

In April 2007 the SEC accused Apple's former top lawyer of fraudulently backdating options to under-report company expenses by $40m. Jobs was cleared by the company’s board of directors, who concluded that he didn’t understand the accounting implications.

Options backdating is not an illegal practice as long as the adjustments are disclosed to shareholders and the relevant authorities. ®