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Wednesday, August 09, 2006, 02:00 pm PT (05:00 pm ET)

Stock grant probe sends Apple execs seeking counsel

Current and former executives of Apple Computer are hiring legal counsel in the face of an ongoing government investigation into the backdating of executive stock grants.

According to a report on Law.com, the San Francisco U.S. Attorney's Office has been investigating whether Apple and other Silicon Valley companies changed the dates on stock option grants to employees in order to maximize executive payouts.

Nancy Heinen, Apple's longtime general counsel who departed from the company earlier this year, has reportedly hired East Bay defense lawyers Cristina Arguedas and Miles Ehrlich to represent her in connection with the probe.

Meanwhile, Apple as a company has hired George Riley, a partner with O'Melveny & Myers, to represent it before the government. Riley was also counsel to Apple in its recent case against AppleInsider and the PowerPage — a case Apple lost in a unanimous decision.

The ongoing government probe has so far lead to two proactive admissions by Apple, each of which were closely followed by lawsuits from investors. To date, a total of three suits have been filed.

In its latest admissions, made last week, Apple said it had discovered additional evidence of irregularities relating to past stock option grants and will likely need to restate its historical financial statements as a result.