The Securities and Exchange Commission has dropped its stock option backdating case against Ann Mather, a Google Inc. board member since November 2005 and former chief financial officer of Pixar Animation Studios.
Her spokesman, Paul Kranhold, said the SEC sent a letter last week saying it was no longer pursuing the case, which it began in April 2008.
The SEC's Los Angeles office had said last year that it would recommend a civil complaint be filed against Mather alleging stock option abuses that occurred during her five years overseeing Pixar's books.
Emeryville, Calif.-based Pixar was acquired by Walt Disney Co. for $7.4 billion in 2006.
Backdating involves retroactively awarding a stock option grant to increase its financial value to the recipient.
If it is not properly disclosed, the backdating of options can exaggerate a company's profit and result in an underpayment of taxes.
A Google spokeswoman declined to comment. The SEC's Los Angeles office did not immediately respond to a request for comment.