RealTime IT News

Steve Jobs to Testify in Backdating Case

Apple CEO Steve Jobs has reportedly been subpoenaed by the Securities and Exchange Commission to testify in a stock-options back-dating case against Apple's former general counsel, Nancy Heinen.

Several news outlets, including the Associated Press, quoted unnamed sources close to the case as confirming Jobs was issued a subpoena last month, though he isn't likely to testify before November.

However, these same reports indicate Jobs is not the target of the SEC investigation. Instead, he is being asked to give a deposition in a civil suit brought in April by the SEC against Heinen.

An SEC spokesperson told InternetNews.com the agency isn't authorized to comment or reveal details of ongoing investigations. Neither Apple nor Heinen's attorney responded by press time to an inquiry on the matter.

The SEC charged Heinen with fraud in connection with the options backdating scandal at Apple that broke last fall. Heinen, who has denied any wrongdoing through her attorney, was charged with violating more than 15 separate provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

The SEC has already settled charges it filed against former Apple CFO Fred Anderson, whom it accused of failing to take steps to ensure that the company's books were correct. Anderson paid the SEC $3.5 million in penalties without admitting or denying the allegations.

In Heinen's case, the SEC said she participated in the "fraudulent backdating of options granted to Apple's top officers that caused the company to underreport its expenses by nearly $40 million."

After news of the case first broke, it was revealed that CEO Steve Jobs knew that favorable grant dates, i.e. backdating, had been selected but not properly revealed. A committee appointed by Apple to investigate the matter said Jobs did not benefit from the grants and was unaware of the accounting implications.

The SEC has not charged Jobs with any fraud, though its investigations are ongoing. He did issue an apology to shareholders and employees for the problems that he said "happened on my watch" and promised to put "proper remedial measures in place to ensure that this never happens again."

Whatever happens, news related to the investigation is likely to percolate for quite some time. According to the Wall Street Journal, the SEC has proposed Heinen's case be tried in September 2008, while the defense has asked it not start until March 2009.

The SEC has or is investigating hundreds of companies, many of them technology-related, caught or accused of illegal backdating.