Securities And Exchange Commission v. Heinen SEC Litigation Release No.

20683 (2008)

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Nature of the Case

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Facts

Apple granted 4.8 million options to six members of its Executive Team (including Heinen) in February 2001. the options were in-the-money when granted. Apple was required to report a compensation charge in its publicly-filed financial statements. The Commission (P) alleges that Heinen caused Apple to backdate options to January 17, 2001, when Apple's share price was substantially lower. Heinen is also alleged to have directed her staff to prepare documents falsely indicating that Apple's Board had approved the Executive Team grant on January 17. Apple failed to record approximately $18.9 million in compensation expenses associated with the option grant. In December 2001 a grant of 7.5 million options to CEO Steve Jobs was given and it too was in the money. Heinen caused Apple to backdate the grant to October 19, 2001, when Apple's share price was lower. P alleges that Heinen caused Apple to improperly fail to record $20.3 million in compensation expense associated with the in-the-money options grant. Heinen then signed fictitious Board minutes stating that Apple's Board had approved the grant to Jobs on October 19 at a 'Special Meeting of the Board of Directors' - a meeting that, in fact, never occurred.