The Securities and Exchange Commission on Thursday settled the last civil case against a former Apple Inc. executive accused of stock-option fraud, closing its investigation into one of Silicon Valley's highest profile companies.
Nancy Heinen, who was Apple's general counsel until leaving in 2006, agreed to pay $2.2 million in disgorgement, interest and penalties.
The investigation into stock-option irregularities at Apple swept up former and current executives, including Chief Executive Steve Jobs. He apologized on behalf of the company and was deposed in the case.
"This is it for backdating of stock options and Apple," Peter Henning, a law professor at Wayne State University, said of Heinen's settlement. "Steve Jobs dodged a bullet."
Heinen, who neither admitted nor denied the allegations, agreed to not serve as an officer at a public company for five years and not practice law for three years.
"With this lawsuit behind me, I look forward to addressing the greater challenges of social justice and economic justice," she said in a statement.
Apple declined to comment.
Earlier this year, the Justice Department concluded that its investigation into Heinen, Apple and other executives would not result in criminal charges, according to people familiar with the case who spoke on condition of anonymity.
The so-called stock-option backdating scandal has ensnared many high-tech companies, triggering scrutiny from regulators, resignations and revised financial results.
Companies issue stock options to employees as rewards. Some companies changed the grant dates of their options to coincide with a dip in the stock price, making them worth more. Although backdating is legal, it must be disclosed as an expense.
Apple was one of the SEC's most prominent targets.
In 2006, as scrutiny of the practice began to increase, Apple admitted that it had improperly backdated stock options over a six-year period starting in 1997. The company took $84 million in charges to correct its accounting.
Jobs did nothing wrong, Apple said, because he didn't understand the relevant accounting laws.
In 2007, the SEC sued Heinen and Fred Anderson, the company's former chief financial officer, over their alleged involvement. Both had been longtime colleagues of Jobs -- Heinen at Next Computer Inc. and Anderson at Pixar Animation Studios.
Anderson settled with the SEC last year, agreeing to pay $3.5 million while admitting no illegal conduct.
The SEC's complaint focused on two large stock-option grants -- a February 2001 grant of 4.8 million options to the company's executive team and a December 2001 grant of 7.5 million options to Jobs. The SEC accused Heinen of instructing her staff to change the dates and covering it up by overseeing the creation of minutes of a board meeting that never happened.
"I assume they wanted to put Jobs' head on a pike, and they didn't get that," said Scott Meyers, head of the hedge fund practice at Levenfeld Pearlstein, a Chicago law firm. "They lost their high-profile case against Jobs, but they settled with a gatekeeper."