Read The Recorder‘s roundup of the stock-option backdating scandal. There won’t be a test later … but there might be a subpoena.



Last month, Heinen agreed to pay $2.2 million to settle options backdating charges brought by the U.S. Securities and Exchange Commission. Anderson had agreed last year to pay $3.5 million to settle SEC claims against him.

The lead plaintiffs lawyers, Mark Molumphy, a partner at Burlingame-based Cotchett, Pitre & McCarthy, and J. Gerard Stranch IV, a lawyer at Branstetter, Stranch & Jennings in Nashville, Tenn., did not return calls for comment.

In court papers, the plaintiffs said the settlement “provides an excellent monetary recovery.” While maintaining the merit of their case, plaintiffs acknowledged the expense and length of continuing the litigation. So did Apple and the individual defendants, who denied liability.

A lawyer for Apple, George Riley, a partner in the San Francisco office of O’Melveny & Myers, did not return a call for comment. Lawyers for the other defendants either did not return calls or declined to comment.

In court papers, Apple said “most of the grants cited in the federal complaint could not give rise to recoverable damages because they were not misdated or the grants were cancelled before they were exercise, thereby providing no benefit for the grant recipient and imposing no loss on the Company. Proceeding with the litigation, however, will impose extensive and unrecoverable costs in the form of attorneys’ fees and expenses.”

Apple also said the plaintiffs had a high unlikelihood of succeeding, given, among other things, claims that were time-barred.

The settlement ends 14 derivative federal actions and five state derivative suits brought against Apple.

An internal investigation at Apple found stock option grants had been backdated from 1997 to 2002 but no member of management, including Jobs, was accused of any wrongdoing.

The revelation forced the Cupertino-based company to record $84 million in expenses.

Amanda Bronstad is a reporter for The National Law Journal, a Recorder affiliate based in New York.