Outside lawyer probed in Jobs' stock grant

Federal investigators are focusing on the large 2001 share grant to Apple CEO Steve Jobs and are probing an outside lawyer, who acted as a consultant for the compensation package. Larry Sonsini, the lead partner at Wilson Sonsini Goodrich & Rosati and an expert on corporate governance, was consulted by Apple's board and legal department on a 7.5 million-share grant that's become the core of the criminal probe by the Securities and Exchange Commission and San Francisco U.S. attorney's office, according to The Recorder. The report says that the grant stands out because the company falsified meeting minutes to show that grant was approved an earlier date--one that was more favorable to Jobs because of the stock price on that date. Although Sonsini's role is unclear, his firm's knowledge about perils of mis-dating stock options and his extensive relationships with Board members' companies and CEO were cited in the report.

"A set of falsified meeting minutes was drawn up to make it appear as though the options were granted at an earlier date -- and a more favorable price -- than when the deal was actually finalized," the report says about the 2001 grant. "The minutes were fabricated by a low-ranking in-house Apple lawyer, though prosecutors also have been looking over her head -- at ex-GC Nancy Heinen and Apple's former CFO, Fred Anderson."

Heinen, who formally hired counsel last year, discussed the grant with Sonsini between its approval by the company's board of directors and her department's completion of the paperwork, the report says. However, Heinen may deflect responsibility by pointing to the Board and/or Sonsini, according to experts quoted in the story.

Sonsini was reportedly very close to Jobs and was not only used by Apple to consult on company business, but also by the companies run by at least three of Apple's five independent board members, including the Gap, Intuit, and Genentech. Sonsini also was a central figure in the HP boardroom scandal last fall--in which he was consulted when director Thomas Perkins quit to protest tactics used to investigate board leaks to the media.

Filed under: Apple