Former Apple lawyer to pay $2.2m for cooking books
Settles Jobs backdating case
The former top lawyer at Apple has agreed to pay $2.2m to settle federal charges she illegally cooked the company's financial books to conceal backdated stock options issued to CEO Steve Jobs and other top executives.
Nancy Heinen, Apple's former general counsel, also agreed to be barred for five years from serving as an officer or director of any public company. The agreement with the Securities and Exchange commission settles a case that was scheduled to go to trial next year, at which Jobs was expected to be called as a witness. Heinen neither admitted nor denied wrongdoing.
In April, 2007, SEC attorneys alleged Heinen caused Apple to fraudulently backdate two options grants to senior executives - including herself. By misrepresenting the true dates that the grants were awarded, the company underreported $40m in expenses.
Apple has admitted that Jobs knew of the backdating, but has said he didn't personally benefit from them and didn't know the practice was illegal. He has never been charged in the matter. Civil lawsuits still allege he is culpable. ®
"the intricacies of stock rules and regulations are not only beyond them, but should be - they pay other people to mind that sort of thing for them, so they don't have to."
So who, exactly, is running the company in your scenario?
The whole point of the board of directors is that *they* are the people running, and responsible for, the company. "The buck stops here", to use the vernacular, is very much the case under UK company law. Except corporate manslaughter, natch.
Ignorance of the law
"Apple has admitted that Jobs knew of the backdating, but has said he didn't personally benefit from them and didn't know the practice was illegal."
I find it hard to believe that someone at the top of a large company would not be aware that providing false information in company accounts is a crime or that forgery in any document presented to any branch of government is likely to drop them in all kinds of trouble.
I don't know about the US but ignorance of fiscal and other law affecting companies is not a defence for company directors in the UK. If it was me, the first question I would have asked when someone suggested backdating would have been "Is it legal?".
Not wishing to sound like an Apple fanboi for taking Job's side, or that I necessarily believe him, but I think that a CEO, like most management types is necessarily general in their knowledge (management knowledge is broad rather than deep) - the intricacies of stock rules and regulations are not only beyond them, but should be - they pay other people to mind that sort of thing for them, so they don't have to.