Apple options backdating litigation still not over

Stephen Withers
Monday, 15 September 2008 21:43

IT Industry - Strategy

Just when Apple watchers thought the backdated options issue was on the verge of being put to bed, another suit is taking the limelight.

Last week, a US judge gave preliminary approval to a settlement in an aggregated case alleging that Apple failed to properly account for multiple situations where options granted to executives were backdated.

The $US14 million to settle that case would come from Apple's insurers.

But now another related case has crawled back out of the woodwork, again involving CEO Steve Jobs, former CFO Fred Anderson and former general counsel Nancy Heinen. A number of present and previous directors are also named as defendants.

Lawyer H Adam Pusin, representing a group of shareholders that has filed the suit against Apple, reportedly claims to have information about the backdating that the plaintiffs in the other case lacked.

By linking the exercise price of an options grant to an earlier and lower share price, the beneficiary of the grant stands to make more money.

According to Bloomberg, "Jobs 'was at the center of the backdating scheme,' according to the suit, which claims Apple's board went 'out of its way to shield Jobs from any responsibility.'"

The Pusin suit casts Anderson and Heinen - both of whom resigned from Apple and settled suits brought against them by the US Securities and Exchange Commission - as scapegoats, and implies that Jobs was aware of what was going on even though the board went out of its way to shield him.