IP Democracy: Wake Me Up When This Backdating Thing is Over

The Feds have finally gained some traction in their probe of Apple’s backdating problem. The SEC has settled claims against former Apple CFO Fred Anderson and has filed charges against former general counsel Nancy Heinen.

Anderson will have to pay a fine of $150,000 and repay options gains of $3.5 million, but he doesn’t admit to any wrongdoing and he’ll be able to work in the financial markets as an officer of a public company without taint or restrictions. The charges against Heinen will move forward.

Anderson, however, wasn’t let off the hook easily. Not only did he have to cough up money, he had to point a finger of blame at Apple’s golden CEO Steve Jobs, who has claimed ignorance about the financial impropriety of Apple’s options backdating. In a statement issued by his lawyer, Anderson claims that he warned Jobs about fixing a date on the executive options (of which Jobs himself was a beneficiary), which had the net effect of boosting the top executives’ compensation while understating company expenses. Anderson also implies that Jobs misled him about board approval of the backdated options.

Clearly the SEC is salivating at the glory-grabbing prospect of reeling in a big fish such as Steve Jobs, and Anderson’s statement was no doubt a part of the deal. The GS-14 enforcement attorneys at the SEC are bolstering their public case for going after an icon, a superstar, a formerly untouchable executive. This is the biggest thing that has EVER happened to them and they’re very excited.

But, when it comes to scandals, options backdating is a total snoozer. I can’t get excited about Anderson’s statement anymore than I can about the whole backdating issue. Aside from the fact that it was probably coerced out of Anderson as part of his deal, does anyone (outside the SEC) think that Steve Jobs would have ignored a warning from Anderson because he was greedy? Because he wanted more money?

More than likely, Jobs wasn’t paying attention to the blah, blah, blah about the options dates or board approval stuff that Anderson was prattling on about because, as I said, it’s utterly boring. That’s not a great thing to say about a CEO of a major corporation, that he can’t focus on crucial financial minutiae, but it’s also, probably, not an indictable crime.

Although Apple’s backdating story now has real legs because for the first time someone has pinned some blame on Jobs, I suspect that investors will continue to ignore the miniscule threat of Apple losing Jobs due to this donnybrook. At least I hope they do because there really isn’t anything interesting about backdating.

Posted by Cynthia Brumfield on April 24, 2007 3:51 PM to IP Democracy