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CFOs of two different computer companies are indirectly accused of wrongdoing: backdating at Apple and "pretexting" at HP. Yet no one has said anything since.
Roy Harris and Joseph McCafferty, CFO Magazine
November 1, 2006
The silence at Apple Computer about the fate of former director and CFO Fred Anderson was deafening after the company's October 4 announcement that it had uncovered 15 instances of possible stock-options backdating between 1997 and 2002.
The lone release made two points. The first was that two former unnamed officers were the subject of "serious concerns" regarding the "accounting, recording, and reporting of stock-option grants." It explained that during a three-month investigation, a special committee of Apple's outside directors, along with independent counsel and accountants, had examined hundreds of thousands of E-mails and documents and interviewed more than 40 current and former employees and others. The second point was that Anderson, CFO from 1996 to 2004, had told the company "that he believes it is in Apple's best interest that he resign from the board at this time."
In the absence of more information, the investment community has been assuming that Anderson is one of the two officers involved in the backdating scandal. "We don't know for sure, but that's certainly the implication of the announcement," says Argus Research analyst Wendy Abramowitz.
An Apple spokesperson declined to expand on the October 4 release. Anderson, whose term as finance chief covered a period of phenomenal growth as the company exploited the iPod and other new markets, remains on the board of eBay.
HP-Gate Goes to Washington
Accusations are flying at Hewlett-Packard. The investigation into the pretexting scandal that has shaken the computer giant took an unexpected turn when former chair Patricia Dunn suggested that CFO Robert Wayman played a larger role in the boardroom-spying case than previously revealed. Dunn and several other executives were forced to resign after allegations surfaced that top HP managers used potentially illegal methods to obtain phone records and other information from journalists and directors to find out who was leaking sensitive information.
In testimony to the House Energy and Commerce subcommittee on September 28, Dunn implied that Wayman approved an investigation into boardroom leaks. "It was my assumption that Mr. Wayman, having ultimate authority over all the resources involved in security and investigations, as well as having been one of the directors who felt the most strongly about the importance of controlling leaks from the board, had provided authorization for whatever work was undertaken," she said. Dunn also told the committee that Wayman referred her to Kevin Hunsaker, the head of HP's global security, to pursue the matter. After her initial statement, Dunn did not mention Wayman during hours of questioning by the committee.
So far, Wayman and CEO Mark Hurd, who took over as chairman, have survived the scandal. "To the best of our knowledge, Bob Wayman had no direct involvement whatsoever in this leak investigation, beyond referring Pattie Dunn to HP's security team," says Ryan Donovan, an HP spokesperson. "Any assumption about Bob Wayman's involvement made by Ms. Dunn was nothing more than that, an assumption." Hurd has admitted to approving a plan to send a phony E-mail to a journalist, but claims he was unaware of the details of other tactics used in the botched investigation. Dunn and Hunsaker face criminal charges stemming from the case. — Joseph McCafferty