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Steve Jobs subpoenaed by SEC for deposition - report

post #1 of 43
Thread Starter 
Apple chief executive Steve Jobs has been subpoenaed by the U.S. Securities and Exchange Commission to give a deposition in a backdating lawsuit against the company's former general counsel, Bloomberg is reporting.

The subpoena isn't part of an SEC investigation, people familiar with the matter say, but rather seeks Jobs's testimony in the Commission's lawsuit against Nancy Heinen, who was sued April 24 for allegedly backdating stock-option grants to Jobs and other members of Apple's executive team.

Heinen is being targeted primarily for her involvement in a December 2001 grant of 7.5 million stock options to Jobs that was backdated to October. The SEC is seeking to prove that Heinen's actions deceived investors because the true cost of the options were hidden by shifting the grant date from Dec. 18, when the stock was $21.01 a share, to Oct. 19, when it stood at $18.30.

The former top Apple legal aid is also charged with self-dealing on a grant to herself, as well as the fabrication of meeting minutes to show the Apple Board of Directors approved the aforementioned grant to Jobs on Oct. 19, 2001, when in fact no such meeting had taken place. In total, Heinen and former Apple chief financial officer Fred Anderson have been accused by the SEC of backdating more than $20 million in stock options in 2001 for Jobs, themselves and other executives.

According to a document filed in a California court last month, Heinen's lawyers are seeking to depose 45 people, including the recipients of the grants. She has denied the charges against her.

Anderson, who like Heinen resigned from his post at Apple ahead of the formal SEC crackdown, settled with the Commission in April. As part of the deal, he agreed to a fine of $150,000 and to repay about $3.5 million in disgorgement of profit, without admitting or denying any wrongdoing.

In a statement that followed his settlement with the SEC, Anderson largely shifted the blame for his involvement in a backdated 2001 Executive Team grant back to Jobs. He claimed that Jobs came to him in late January of 2001 and informed him that he had received the Board's approval for the massive grant, when in fact no approval had been granted.

Nevertheless, Jobs appears to have been cleared of any wrongdoing by the SEC. This month's subpoena, however, signifies the second time he's been called upon for questioning by federal investigators regarding his company's backdating scandal. In January, he arrived at the San Francisco federal building for an interview with the Justice Department and the Securities and Exchange Commission flanked by lawyers, though the subject of the meeting was never made public.

At issue for authorities at the time were over 6,400 additional company stock option grants which were similarly misdated between the years of 1997 and 2002. After cooperating with the SEC, Apple said in December that it would take an $84 million charge for the bulk of the fortuitously granted options, but maintained that its own internal investigation into the matter turned up no wrongdoing by Jobs or any other member of its current management team.

In April, the SEC issued an official statement that effectively wiped the slate clean for Apple as an organization and its problematic stock option grants, saying that the company's eagerness to make amends left little reason to consider punishment.

"Apple's cooperation consisted of, among other things, prompt self-reporting, an independent internal investigation, the sharing of the results of that investigation with the government, and the implementation of new controls designed to prevent the recurrence of fraudulent conduct," the release said.

Following that release, it was believed that the SEC's only remaining beef was with Heinen.
post #2 of 43
Shit! What a situation for SJ to be put in.
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post #3 of 43
Uh-oh.

(Add: A court did recently -- and if I am not mistaken, for the first time -- rule that options backdating was illegal).
post #4 of 43
Quote:
Originally Posted by AppleInsider View Post

Developing...

Is Matt Drudge writing for AI now?
post #5 of 43
Quote:
Originally Posted by anantksundaram View Post

Uh-oh.

(Add: A court did recently -- and if I am not mistaken, for the first time -- rule that options backdating was illegal).

SJ needs to use the 'Reagan' defense ...

addendum: LOL, I just realized that is an ambiguous suggestion I made, it could mean 'Out spend them' or "I do not recall".. I meant the latter.
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post #6 of 43
Guys, it's a deposition. This is in regards to a deposition against Nancy Heinen - not a new investigation on Steve Jobs. People are finally understanding this and shares of AAPL have turned back positive for the day as I write.
post #7 of 43
Quote:
Originally Posted by wscapital View Post

Guys, it's a deposition. This is in regards to a deposition against Nancy Heinen - not a new investigation on Steve Jobs. People are finally understanding this and shares of AAPL have turned back positive for the day as I write.

Hence my comment. He will be under oath. He has to be very careful not to say anything in his 'deposition' that can be used against him later.
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post #8 of 43
His army of lawyers is already typing up what he'll be saying. He'll be fine, my friends
post #9 of 43
Quote:
Originally Posted by wscapital View Post

His army of lawyers is already typing up what he'll be saying. He'll be fine, my friends

lol, I know and I was only kidding about the Reagan defense ...
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post #10 of 43
Quote:
Originally Posted by digitalclips View Post

lol, I know and I was only kidding about the Reagan defense ...

What about the Clinton defence..?
Sorry

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post #11 of 43
Quote:
Originally Posted by wscapital View Post

His army of lawyers is already typing up what he'll be saying. He'll be fine, my friends

digitalclips is right: he has to be VERY careful.

Alberto Gonzales had an army of lawyers too..... an army of lawyers is not necessarily a foolproof wall, esp. when a person has a tendency to be headstrong! \
post #12 of 43
Quote:
Originally Posted by lostkiwi View Post

What about the Clinton defence..?
Sorry

Oh! That joke sucks!
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post #13 of 43
Quote:
Originally Posted by digitalclips View Post

Oh! That joke sucks!




(not meant to be a cigar...eeewww...)
post #14 of 43
Quote:
Originally Posted by digitalclips View Post

Oh! That joke sucks!

Guilty as charged

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post #15 of 43
Some years I was in an automobile accident with spectacular damage, and the other party was ticketed. I came home one day and found a subpoena from the sherrif nailed to my front door! I was shaking as hard as Los Angeles during a 8.0 quake as I took that thing down. It said that the other person had contested the ticket in traffic court, so the case was continued and I was subpoenaed as a witness. They needed my testimony. So I went and testified. My testimony? "She ran a yield sign." The judge said to the policeman, "Was there a yield sign?" The police officer said, "Yes." The judge said to the defendant, "Since you lost your car, I will only fine you $35." The defendant burst out into rage, disparaging my character. I looked at the judge. He smiled and said, "This happens all the time."

It's scary getting a subpoena, but Steve Jobs was not even subpoenaed to go to court. He only had to give a deposition. He's just a witness. He just has to say the equivalent of "she ran a yield sign."

Ho-hum, I'm going back to sleep. Er, work.
post #16 of 43
Quote:
Originally Posted by anantksundaram View Post

digitalclips is right: he has to be VERY careful.

Alberto Gonzales had an army of lawyers too..... an army of lawyers is not necessarily a foolproof wall, esp. when a person has a tendency to be headstrong! \

Ok then "I don't recall" maybe the best strategy after all. When was Steve sick ?
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post #17 of 43
Quote:
Originally Posted by Panu View Post

Some years I was in an automobile accident with spectacular damage, and the other party was ticketed. I came home one day and found a subpoena from the sherrif nailed to my front door! I was shaking as hard as Los Angeles during a 8.0 quake as I took that thing down. It said that the other person had contested the ticket in traffic court, so the case was continued and I was subpoenaed as a witness. They needed my testimony. So I went and testified. My testimony? "She ran a yield sign." The judge said to the policeman, "Was there a yield sign?" The police officer said, "Yes." The judge said to the defendant, "Since you lost your car, I will only fine you $35." The defendant burst out into rage, disparaging my character. I looked at the judge. He smiled and said, "This happens all the time."

It's scary getting a subpoena, but Steve Jobs was not even subpoenaed to go to court. He only had to give a deposition. He's just a witness. He just has to say the equivalent of "she ran a yield sign."

Ho-hum, I'm going back to sleep. Er, work.

So far many comments here have been tongue in cheek but I think you are over simplifying. The SEC are not quite the same as traffic court ...
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post #18 of 43
In agreement with Panu. I'm going to lunch.
post #19 of 43
Quote:
Originally Posted by wscapital View Post

In agreement with Panu. I'm going to lunch.

Well I really hope he is right too Lunch ... mmm good idea.
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post #20 of 43
Quote:
Originally Posted by digitalclips View Post

So far many comments here have been tongue in cheek but I think you are over simplifying. The SEC are not quite the same as traffic court ...

No this is not oversimplifying. It's the same legal system. The issue before the court is Heinen. Jobs is being subpoenaed as a witness, but he doesn't have to make a personal appearance in court. They are allowing him to give his testimony in a written document, which is called a deposition. This means they need his version of the events but neither the defense nor the prosecution wants to ask him any questions.

The defendant is never allowed to give a deposition.

Jobs will go to his attorney's office, make his statement about what happened, the legal aide will type it up, he'll sign it, it will be properly notarized and such, and delivered to the court.

As I said, a big ho-hum.
post #21 of 43
Quote:
Originally Posted by lostkiwi View Post

What about the Clinton defence..?
Sorry

That was a lame one, and he did commit perjury in doing so. If he'd just admitted it, his opponents would be upset, but they wouldn't have had anything to prosecute.

The Jobs situation is different enough.
post #22 of 43
Next up... Steve Jobs gets gas from eating at Taco Bell... how will it affect the stock!

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post #23 of 43
Quote:
Originally Posted by SpamSandwich View Post

Next up... Steve Jobs gets gas from eating at Taco Bell... how will it affect the stock!

Right on! While the headline is factually correct (Jobs receives subpoena) the IMPLIED headline is that Jobs is in trouble. The headline was designed to draw mouse clicks. Journalists and their editors know exactly how people react to things. They teach this in journalism school. They know that what is not said or explained will be interpreted in certain ways depending on the headline.

Jobs mentioned in back-dating investigation + Jobs receives subpoena = Jobs in legal trouble.

Very simple journalism logic, all planned in advance, executed to perfection. Of course it helps that we Mac fanboys go ballistic over this stuff. They know that too, all too well.

How does it feel to be manipulated?
post #24 of 43
Quote:
Originally Posted by lkrupp View Post

Right on! While the headline is factually correct (Jobs receives subpoena) the IMPLIED headline is that Jobs is in trouble. The headline was designed to draw mouse clicks. Journalists and their editors know exactly how people react to things. They teach this in journalism school. They know that what is not said or explained will be interpreted in certain ways depending on the headline.

Jobs mentioned in back-dating investigation + Jobs receives subpoena = Jobs in legal trouble.

Very simple journalism logic, all planned in advance, executed to perfection. Of course it helps that we Mac fanboys go ballistic over this stuff. They know that too, all too well.

How does it feel to be manipulated?

Hence I only joked about a Reagan defense. Who is taking this too seriously? I think most comments have been light and positive.
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post #25 of 43
While backdating is now illegal, it wasn't when it was being done, at the height of the internet boom. It is a civil action today. Anderson and Heinen are being sued. For money.

Even if Jobs had conspired in a way that was tortious -- I think that's the term -- he'd just owe a few million bucks, which I believe he could pay out of his piggy bank. What has lost a few CEOs their jobs has been that they've backdated, and that has been only one of a number of ways that they've inflated their compensation at the expense of the shareholder, while not making their corporations more profitable. The stockholders have nothing to complain about with SJ. He has made them a s__load of money in the last 10 years.

The morality of these practices back when they were done was questionable, but their legality was not. Once the new laws were passed in the wake of Enron and the stock bubble bursting in 2001, Apple restated its earnings, a couple of scapegoa-- er, a couple of people resigned, and Jobs was cleared of wrongdoing. I'm sure that Heinen will question the official version of things, trying to get out of her fines. Jobs will walk, largely because if you took a vote of Apple shareholders, they'd elect Steve King of Apple for Life. What's that stock selling for recently? How many Macs, iPods and iPhones are selling this Christmas? Here, Steve, take this slap on the wrist and let's party!
post #26 of 43
While no one is completely bulletproof, it would be some serious "egg on the face" to have formal charges leveled on Steve while being overseen by a Board of Directors that includes the former Vice President. (what being the founder of the internet and all)
OMG here we go again...
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post #27 of 43
That's OK, he worked for Clinton.

Quote:
Originally Posted by BuzDots View Post

...that includes the former Vice President. (what being the founder of the internet and all)
post #28 of 43
Quote:
Originally Posted by lostkiwi View Post

What about the Clinton defence..?
Sorry

I didn't inhale?

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post #29 of 43
Quote:
Originally Posted by digitalclips View Post

Hence my comment. He will be under oath. He has to be very careful not to say anything in his 'deposition' that can be used against him later.

He was already investigated by the SEC and acquitted. They can't reopen a case they acquitted him on.
post #30 of 43
Quote:
Originally Posted by mdriftmeyer View Post

He was already investigated by the SEC and acquitted. They can't reopen a case they acquitted him on.

Are you sure (cite?). I thought he was only acquitted by his own board......
post #31 of 43
Quote:
Originally Posted by lostkiwi View Post

What about the Clinton defence..?
Sorry

What about it? Do you have any idea what you're talking about?
post #32 of 43
Quote:
Originally Posted by Swift View Post

While backdating is now illegal, it wasn't when it was being done, at the height of the internet boom. It is a civil action today. Anderson and Heinen are being sued. For money.

Even if Jobs had conspired in a way that was tortious -- I think that's the term -- he'd just owe a few million bucks, which I believe he could pay out of his piggy bank. What has lost a few CEOs their jobs has been that they've backdated, and that has been only one of a number of ways that they've inflated their compensation at the expense of the shareholder, while not making their corporations more profitable. The stockholders have nothing to complain about with SJ. He has made them a s__load of money in the last 10 years.

The morality of these practices back when they were done was questionable, but their legality was not. Once the new laws were passed in the wake of Enron and the stock bubble bursting in 2001, Apple restated its earnings, a couple of scapegoa-- er, a couple of people resigned, and Jobs was cleared of wrongdoing. I'm sure that Heinen will question the official version of things, trying to get out of her fines. Jobs will walk, largely because if you took a vote of Apple shareholders, they'd elect Steve King of Apple for Life. What's that stock selling for recently? How many Macs, iPods and iPhones are selling this Christmas? Here, Steve, take this slap on the wrist and let's party!

Speaking of Enron, the Sarbanes-Oxley Act is widely regarded as extremely harmful to investment and reduces American competitiveness, I've heard it called the "Accountant Protection Act". Companies have to be allowed to fail, even if they do so in spectacular fashion, in order for their true value in the marketplace to be determined... this is not an excuse for fraud, which should always remain prosecutable.

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post #33 of 43
Quote:
Originally Posted by SpamSandwich View Post

Speaking of Enron, the Sarbanes-Oxley Act is widely regarded as extremely harmful to investment and reduces American competitiveness, I've heard it called the "Accountant Protection Act".

Yes, there is lots of evidence that S-OX was legislation based on junk or non-existent data. And yes, evidence does show that S-OX has been a boon to accountants and lawyers. There is also some evidence that it may have delayed or prevented some smaller firms from going public (and hastened the move of some smaller public firms to go private), although this is quite difficult to pin down.

But as to S-OX having a negative impact on investment or US competitiveness -- despite lots of media and some public policy wailing to that effect -- credible empirical evidence shows essentially no impact at all.
post #34 of 43
Steve may be worried about being subpoenaed by the SEC, but I bet he is even more stressed out trying to decide what to wear to his deposition.
post #35 of 43
At long last, Steve Jobs is required to testify UNDER OATH so that, if he lies, he can be prosecuted for Perjury and Obstruction of Justice.

Some would have us believe that Sterve Jobs, the obsessive micro-manager, hand picked a calendar date to maximize his profit from stock options worth $646,6 millions, but didn't realize that:

1- No one is worth nearly $650 millions;
2- The profits of Apple should be divided among stockholders and don't belong to the CEO and his puppet Vice-Presidents.

In the alternative, Steve Jobs would have us believe that Nancy Heinen, Apple Vice-President of Legal Affairs, acted on her own, in secrecy, and definitely not at the request of Steve Jobs, in deciding to secretly backdate stock options to the benefit of Steve Jobs and Apple higher management.

Fred Anderson, Apple's former Chief Financial Officer, is on record as stating that he backdated stock options only after Steve Jobs "informed him that he had received the Board's approval for the massive grant, when in fact no approval had been granted".


Quote:
Anderson, who like Heinen resigned from his post at Apple ahead of the formal SEC crackdown, settled with the Commission in April. As part of the deal, he agreed to a fine of $150,000 and to repay about $3.5 million in disgorgement of profit, without admitting or denying any wrongdoing.

In a statement that followed his settlement with the SEC, Anderson largely shifted the blame for his involvement in a backdated 2001 Executive Team grant back to Jobs. He claimed that Jobs came to him in late January of 2001 and informed him that he had received the Board's approval for the massive grant, when in fact no approval had been granted.


Steve Jobs will have his day in Court.

post #36 of 43
Quote:
Originally Posted by ouragan View Post

1- No one is worth nearly $650 millions;
2- The profits of Apple should be divided among stockholders and don't belong to the CEO and his puppet Vice-Presidents.

While not commenting the SEC investigation I will pick you up on these comments you made if I may.

Obviously you are entitled to your opinion but so am I and I think he is worth that and more ... but for SJ, what would Apple be worth now, if even still in existence? Yet here's Apple now with a market cap the envy of the the tech industry and an amazing product portfolio and sales through the roof.

Many, if not perhaps most, CEOs are not worth for they get paid one could argue, but SJ one very big exception.

There would be nothing to divide up but for Steve. This isn't just some Apple fan-boy's comment it is from someone with a lot of stock in Apple. As well as a lot of Apple equipment.
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post #37 of 43
Quote:
Originally Posted by msimpson View Post

Steve may be worried about being subpoenaed by the SEC, but I bet he is even more stressed out trying to decide what to wear to his deposition.

mmmm black maybe?
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post #38 of 43
Quote:
Originally Posted by ouragan View Post

At long last, Steve Jobs is required to testify UNDER OATH so that, if he lies, he can be prosecuted for Perjury and Obstruction of Justice.

Some would have us believe that Sterve Jobs, the obsessive micro-manager, hand picked a calendar date to maximize his profit from stock options worth $646,6 millions, but didn't realize that:

1- No one is worth nearly $650 millions;

Can you keep fantasies out of your argument? Ideally, you are right, but stick to reality here. He was given options, and the issue is not the options or the amount, but the dating, and particularly document fabrication to suggest that a meeting took place when it did not.

Quote:
2- The profits of Apple should be divided among stockholders and don't belong to the CEO and his puppet Vice-Presidents.

If there was enough discontent with stockholders, they would object, so where is the stockholder revolt?

Quote:
In the alternative, Steve Jobs would have us believe that Nancy Heinen, Apple Vice-President of Legal Affairs, acted on her own, in secrecy, and definitely not at the request of Steve Jobs, in deciding to secretly backdate stock options to the benefit of Steve Jobs and Apple higher management.

Fred Anderson, Apple's former Chief Financial Officer, is on record as stating that he backdated stock options only after Steve Jobs "informed him that he had received the Board's approval for the massive grant, when in fact no approval had been granted".

Steve Jobs will have his day in Court.


I think this is a projection of some sort on your part. This new development doesn't mean that yet.
post #39 of 43
Quote:
If there was enough discontent with stockholders, they would object, so where is the stockholder revolt?


There are outstanding stockholder class actions because backdating stock options is ILLEGAL, meaning that Steve Jobs and his Vice-Presidents cannot take money from Apple. Just like Fred Anderson, they must pay back the profit they made from exercising illegal stock options.

Greed doesn't pay!

post #40 of 43
Quote:
Originally Posted by Panu View Post

No this is not oversimplifying. It's the same legal system. The issue before the court is Heinen. Jobs is being subpoenaed as a witness, but he doesn't have to make a personal appearance in court. They are allowing him to give his testimony in a written document, which is called a deposition. This means they need his version of the events but neither the defense nor the prosecution wants to ask him any questions.

The defendant is never allowed to give a deposition.

Jobs will go to his attorney's office, make his statement about what happened, the legal aide will type it up, he'll sign it, it will be properly notarized and such, and delivered to the court.

As I said, a big ho-hum.

Apparently you have confused a deposition with an interrogatory. In a deposition, he doesn't have to go to court, but he will be asked questions and have to testify under oath, in person, in front of the prosecution.
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