Risk Management

Apple’s Jobs Was Subpoenaed, Report Says

Bloomberg story cites two sources as saying the SEC wants to depose the CEO in its options backdating case against general counsel Nancy Heinen.
Roy HarrisSeptember 20, 2007

The Securities and Exchange Commission has subpoenaed Apple Inc. CEO Steve Jobs to give a deposition in the SEC’s stock-options backdating lawsuit against former Apple general counsel Nancy Heinen, according to a Bloomberg News report citing “two people familiar with the matter.”

An SEC spokesman told CFO.com that the commission would not comment, and a query to an Apple spokesman wasn’t immediately answered. Bloomberg’s report said that an Apple spokesman had declined to comment, and that an attorney for Jobs hadn’t returned a call.

Bloomberg reported that its sources said the subpoena — which isn’t part of an SEC investigation of Apple itself — seeks Jobs’s testimony in the April 24 suit the SEC filed against Heinen for allegedly backdating stock-option grants to Apple executives, including Jobs. Deposition subpoenas aren’t generally made public.

On the same day that the SEC suit was filed, former Apple CFO Fred Anderson issued a statement through his attorney saying that Jobs and Anderson had had a discussion in late January 2001, and that the CFO at the time had advised Jobs about the basics of proper stock-option dating. The Anderson statement said that Jobs had told Anderson that prior board approval had been granted for Apple’s stock-option decisions and “Fred relied on these statements by Mr. Jobs and from them concluded the grant was being properly handled.” (A committee of Apple’s board, chaired by former U.S. Vice President Al Gore, had expressed “complete confidence in Steve Jobs.”)

Anderson himself agreed to pay more than $3.6 million to settle SEC charges stemming from his role in the company’s options backdating scandal.

In the April 24 suit naming Heinen, the SEC alleged that she was involved in backdating a 7.5-million share option grant to Jobs in 2001, among earlier grants to others. Apple said last Dec. 29 that Jobs had recommended favorable dates on some options, other than his own, according to the news-service report.

A court filing cited by Bloomberg said that Heinen’s lawyers had sought to depose 45 people, including the recipients of the grants. An Aug. 31 document filed by Heinen’s lawyers and the SEC in federal court in San Francisco, and cited by Bloomberg, said that those whose depositions were sought “include the range of individuals involved in the stock option granting [including] “the grant recipients themselves.”