Former CFO points to Jobs

Apple's former Chief Financial Officer (CFO) Fred Anderson, who has agreed to pay approximately $3.5 million to make up for his personal gains in Apple's illegal stock options scandal, has pointed a finger at company CEO Steve Jobs. The ex-executive told his attorney that he warned Jobs in late January of 2001 that the options grant in question would need to be priced based on the date of the actual agreement from the board of directors, according to Marketwatch. Anderson's attorney, Jerome Roth, said Apple's chief assured Anderson that the board had already approved the options grant. Anderson says that he now believes the Apple board may not have given the necessary prior approval to the grants issued in February of 2001, according to the report. SEC officials wouldn't say whether Jobs has been implicated throughout their lengthy investigation, but industry experts agree that Apple will suffer greatly if its chief is forced to step down as CEO of the company. [updated]

Apple's stock took a large hit when word came that Jobs was at least partially involved in 'irregularities' of the company's prior stock options grants. Fears that Apple's chief would lose his foothold as visionary and driving force at the Cupertino-based company sent tremors through its share price as investors acted quickly to avoid a potential stock dropout.

Those fears mostly subsided, however, as Apple's own internal investigation turned up no links to Jobs knowing involvement with the scandal. Industry analysts repeatedly denounced the likelihood that criminal charges would be brought against the executive, but several legal experts stressed that Jobs wasn't "out of the woods" yet.

The San Jose Mercury News yesterday published a report discussing Jobs' likely legal stance in the ongoing investigation, and cited reasons why Apple's head would likely skirt criminal charges.

"When you start thinking about lying, cheating and stealing, there's a mental state that you know what you're doing is wrong," said one former federal prosecutor not involved in the Apple case, according to the report. "If you don't appreciate that, it's very difficult for the government to show that you're a criminal."

Prosecutors would be hard pressed to base a securities fraud case against Jobs on the backdating of his own grant, the report stated, mostly because the grant was approved by Apple's board and not Jobs himself.

"Jobs can take the defense, 'What do I know about the proper accounting for this transaction? I didn't keep a secret from anybody and assumed the accounting would be proper,'" said Stanford law professor and former SEC commissioner Joseph Grundfest. "That would seem to distinguish the Apple situation."

These defense strategies could collapse, however, if Anderson's claim that Jobs knew about the erroneous dates proves true. Further, if Jobs intentionally misled the former CFO by insisting that the grant had been pre-approved by Apple's board -- which Apple already admitted occurred via a fictitious board meeting that never happened -- Jobs could find himself on center stage in the investigation without a solid defense.

by MacNN Staff