Analyst: Anderson, Heinen may be former Apple executives responsible for irregular options grants

“Apple Computer’s former chief financial officer, Fred Anderson, as well as its most recent top legal aid, Nancy Heinen, may be the two former executives whose actions were brought into question regarding the company’s ongoing stock options scandal, one Wall Street analyst says. ‘Yesterday, Apple provided an update on its options investigation through an 8-K filing and press release,’ American Technology Research analyst Shaw Wu told clients on Thursday,” Katie Marsal reports for AppleInsider.

“In its release, Apple said stock option grants made on 15 dates between 1997 and 2002 appear to have been backdated, and reiterated that it will likely need to restate its historical financial statements as a result,” Marsal reports. “As part of its disclosure Wednesday, Apple also mentioned it has ‘serious concerns’ regarding two unnamed former executives who may be responsible for the counting, recording, and reporting of questionable stock options grants.”

“‘From our assessment, we believe the executives could be former CFO Fred Anderson, who resigned from the Board of Directors, and former general counsel Nancy Heinen,’ Wu told clients. Heinen, who abruptly turned in her resignation from Apple in May, is the only former company executive reported to have independently sought legal counsel as a result of the ongoing options scandal. In August she obtained the services of East Bay defense lawyers Cristina Arguedas and Miles Ehrlich to represent her in connection with the probe,” Marsal reports. “Meanwhile, Apple as a company has hired George Riley, a partner with O’Melveny & Myers, to represent it in the advent of a government investigation.”

More in the full article here.

Related articles:
Analyst: Apple restatement due to options irregularities not expected to be significant – October 04, 2006
Apple’s special committee reports findings of stock option investigation – October 04, 2006
Shareholders allege Apple execs reaped ‘millions’ in unlawful profits – August 23, 2006
How options-backdating irregularities can affect your Apple Computer stock – August 23, 2006
Apple’s options imbroglio: Mac-maker granted options at or near key events in company’s history – August 18, 2006
Apple added to Nasdaq’s list of ‘delinquent companies’ – August 18, 2006
Apple unlikely to be delisted by NASDAQ – August 16, 2006
Apple CEO Steve Jobs drawn into stock options scandal – August 15, 2006
Apple announces update regarding stock option grants – August 11, 2006
As expected, Apple delays quarterly results due to stock-options grants review – August 11, 2006
Some stock options grant decisions were made by Apple board, and potentially, CEO Steve Jobs – August 10, 2006
Disney: no material impact from Pixar options – August 09, 2006
Pixar options draw scrutiny – August 08, 2006
Apple stock options scandal? What scandal? – August 07, 2006
Class action lawsuit over stock options filed against Apple Computer, Inc. – August 04, 2006
Wall Street forgiving of Apple’s stock option irregularities; CEO Jobs unlikely to be terminated – August 04, 2006
Apple’s stock option irregularities escalate into a scandal as world awaits Steve Jobs’ WWDC keynote – August 04, 2006
Apple warns of profit restatement dating back to 2002 – August 04, 2006
Apple loses 3.5% to $67.15 in premarket trading – August 04, 2006
Apple announces update regarding stock option grants – August 03, 2006
Shareholder’s options suit against Apple alleges ‘striking pattern that could not have been chance’ – July 11, 2006
Apple announces update regarding stock option grants – July 05, 2006
UBS: stock options probe unlikely to hurt Apple – June 30, 2006
Apple joins growing list of companies entangled in stock option ‘irregularities’ – June 29, 2006
Apple to investigate stock option grant ‘irregularities’ made between 1997 and 2001 – June 29, 2006


  1. Meanwhile Apple Board Memeber Al Gore is wondering….”Will my 2008 Presidential bid be sidelined because of this Apple stock scandal?
    And are Republicans behind this to AGAIN keep me from being President?”

    Intrique, intrique.

  2. From that article cited above just for Jimbo:
    “Maybe public-minded board (and compensation committee) member Al Gore could take a breather from global warming and divert a little of that righteous indignation of his toward cleaner corporate governance?”

  3. Anderson and Heinen will be the sacrifical lambs the government requires in these kind of investigations. At the time the grants were back dated, it was not against any law, rule or regulation to do so. That’s why so many (well over 100) firms are now ‘guilty’ of the practice. As much as some would like to think so, there just aren’t that many crooks wandering around corporate offices.

    But the public doesn’t like the practice, so the government has to show that it is actively working to protect the public’s interest, which is bullcrap.

    The public’s interest was not hurt by this practice. The only people that should have any problem with it, are shareholders. The government has no business ‘protecting’ shareholders from public opinion.

  4. This is bullcrap.

    Ex Post Facto!

    If it wasn’t illegal when it happened then why are we discussing it?
    Someone pls explain?

    Also- The Motley Fool editorial has a very anti corp slant.
    • Apple has some of the hardest working execs in the industry. They deserve compensation.
    • We aren’t talking about a failing company that’s handing out unwarranted bonuses to execs.

  5. True, mostly the shareholders should be concerned about this. But there is a demonstrable public interest–in the form of taxes and ensuring a level business playing field.

    Backdating the granting of the options allows the recipient to avoid paying short term capital gains taxes if he/she wants to sell earlier than they otherwise would have, and pay the lower long term capital gains rate instead.

    Not to mention the fact that it all fails the “smell” test. It just feels wrong to allow this, because you know backdating would never occur if the price of the shares in question fell instead of rising. So in a sense it’s a way of providing additional low/no cost compensation to an employee.

    Hmm…MDN magic word “letter”. As in this whole situation fits the letter of the law, but not necessarily the spirit of the law.

  6. Are you people being dense on purpose? Of course it is legal to backdate options. It was in 1997, and it is today.

    However, that is not the point.

    The point is that it is illegal to backdate options and NOT REPORT IT and NOT ACCOUNT FOR IT.

    That’s the problem: options backdating has accounting implications. This affects the quarterly reports, including both income statement and balance sheet, which pisses off the SEC. It also affects the taxes the company has to pay, which gets the IRS all hot and bothered.

    So yes, the public does have a specific financial interest (in making sure corporates pay their fair share of assessed taxes), and the public also has a broader interest in the accuracy and reliability of public companies’ public filings.

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