The U.S. Securities and Exchange Commission on Thursday settled stock options backdating charges against former Apple general counsel Nancy Heinen.
Under terms of the deal, Ms. Heinen agreed to pay $2.2 million for stock options gains, penalties, and other costs. She has been barred from becoming an officer or director of a public company for the next five years.
Ms. Heinen caused Apple to back date two large options grants to senior executives, according to a complaint filed in April 2007 by the SEC in federal court in the Northern District of California.
The grants in question included 4.8 million options in February 2001 to six Apple executives, including Ms. Heinen, and 7.5 million options to CEO Steve Jobs in December 2001.
Ms. Heinen fraudulently backdated the options—allowing the purchase of below market shares—and altered company records to conceal the move, according to the SEC. Apple erred by not filing a compensation charge in its public financials.
The backdating allowed Apple to under report expenses by $40 million, the complaint said.
The SEC had alleged that Ms. Heinen signed a fictitious board minutes statement that said Apple directors signed off on Mr. Jobs’ options grants under a special meeting of the company’s board of directors, an event that never happened.
The commission ordered Ms. Heinen to pay $1,575,000 for proceeds she made in the sale of Apple options, $400,000 in interest, and $200,000 in penalties.