Heinen resigned last May, as Apple started to investigate allegations that stock options had been improperly backdated. Perhaps most significant, two people familiar with Heinen’s defense say she has no damaging information against Jobs, further evidence Apple’s leader may avoid legal repercussions from the company’s backdating problems.
Based on interviews with people knowledgeable about the Apple probe, Heinen played a central role in two instances of alleged backdating being examined by both the SEC and federal prosecutors. The second – which has not previously been reported in detail – involves grants to top executives, including Heinen, who faces SEC allegations she profited herself from backdating. The SEC could still sue Jobs, but has not signaled it intends to do so.
“It’s a tragedy for someone who has as much commitment to integrity as Nancy does,” said James Pooley, a Palo Alto lawyer and Heinen friend.
Heinen’s main problems stem from her involvement in a December 2001 grant of 7.5 million stock options to Jobs that were backdated to October through falsified minutes of a board meeting that did not occur.
Lawyers familiar with the grant say the board believed it could use the October date because the stock price was higher than when it first approved the grant to Jobs in August, although lower than in December, when it was finalized after months of negotiations.
The Securities and Exchange Commission is expected this week to bring its first legal action in the Apple backdating probe, targeting the company’s former top lawyer for her alleged role in rigging options, according to sources familiar with the matter.
Former General Counsel Nancy Heinen’s lawyers are vowing to fight any SEC charges, saying she’s the scapegoat in an investigation that has generated unusual attention because it involves Apple and Steve Jobs, its famous CEO.
In their first public comments, Heinen’s attorneys say she broke no laws and only took steps approved by Apple’s directors.“It’s simply unfair to single out Nancy Heinen for enforcement action from among the thousands of executives in hundreds of companies all over this country who’ve been swept up in these stock options cases,” said Miles Ehrlich, Heinen’s lawyer.“Nancy didn’t backdate stock options, and she didn’t deceive anyone.” The SEC also is weighing a lawsuit against Fred Anderson, Apple’s former chief financial officer, according to sources involved in the case.Anderson lawyer Jerome Roth did not return messages seeking comment.Marc Fagel, the SEC’s chief of enforcement in San Francisco, declined comment.The SEC has said general counsels and CFOs have special obligations to protect investors against accounting fraud.