Steve Jobs, Execs, Accused of Taking Big Bite Out of Apple--Again

The class action lawsuit suit was filed in California Northern District Court in San Jose last Friday, but records were not made public until this week.

The case was filed by Apple stockholders Martin Vogel and Kenneth Mahoney who, in addition to Jobs, named ex-CFO Fred Anderson, former general counsel Nancy Heinen, and board members William Campbell, Millard Drexler, Arthur Levinson and Jerome York as defendants.

The complaint is a follow up to a 2006 lawsuit in which Apple subsequently admitted to illegally granting stock options to the execs.

"An internal investigation has discovered irregularities related to the issuance of certain stock option grants made between 1997 and 2001," the company said in a statement at the time. "One of the grants in question was to CEO Steve Jobs, but it was subsequently cancelled and resulted in no financial gain to the CEO."

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The latest suit seeks to recoup some of the $7 billion-plus in stock value that was decimated after Apple's admission, according to Information Week.

In April 2007, the U.S. Securities and Exchange Commission charged former general counsel Heinen with "participating in the fraudulent backdating of options granted to Apple's top officers that caused the company to underreport its expenses by nearly $40 million.

"Apple granted 4.8 million options to six members of its executive team (including Heinen and ex-CFO Anderson) in February 2001," according to the SEC complaint.

Apple was required to report a compensation charge in its publicly-filed financial statements. The Commission alleges that, in order to avoid reporting this expense, 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. As a result, Apple failed to record approximately $18.9 million in compensation expenses associated with the option grant," the SEC filing said. "Anderson, who should have realized the implications of Heinen's actions, failed to disclose key information to Apple's auditors and neglected to ensure that the company's financial statements were accurate. Both Heinen and Anderson personally received millions of dollars in unreported compensation as a result of the backdating."

As part of a settlement with the SEC, Anderson agreed (without admitting or denying the allegations) to pay approximately $3.5 million in penalties. Heinen is still involved in the suit.