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Ex-Apple lawyer could face SEC lawsuit for options backdating

[JURIST] The US Securities and Exchange Commission (SEC) [official website] may file a lawsuit against former Apple, Inc. [corporate website] General Counsel Nancy Heinin for allegations of backdating two 2001 stock option grants, Heinin's lawyers said Monday. The incidents in question involved one grant to CEO Steve Jobs and another to several executives including Heinin herself. In particular, Heinin allegedly advocated moving the January 2001 option grant date to a date after an industry convention at which Apple made several announcements that raised the company's stock price. Heinin contends she actually tried to persuade the Board of Directors to move the option dates forward, which would result in less favorable pricing for the option holders. Heinin's lawyers also confirmed that the US Department of Justice [official website] is currently investigating Heinin for awarding stock options to Apple executives.

In January, the US Attorney's office in San Francisco opened a criminal probe [JURIST report] into Apple's option backdating practices and specifically the option grant to CEO Steve Jobs for which Heinin could face a lawsuit. The investigation followed Apple's findings [JURIST report] in a December 2006 internal report that its executives committed no wrong-doing and that Jobs did not financially benefit from stock options, despite knowledge of favorable grant dates. Bloomberg has more.

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Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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