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Former Apple legal chief suspected in options scandal

Apple Computer's former chief financial officer, Fred Anderson, as well as its most recent top legal aid, Nancy Heinen, may be the two former executives whose actions were brought into question regarding the company's ongoing stock options scandal, one Wall Street analyst says.

"Yesterday, Apple provided an update on its options investigation through an 8-K filing and press release," American Technology Research analyst Shaw Wu told clients on Thursday.

In its release, Apple said stock option grants made on 15 dates between 1997 and 2002 appear to have been backdated, and reiterated that it will likely need to restate its historical financial statements as a result.

"While details such as the amount of non-cash charges have yet to be disclosed, we nevertheless view Apple's latest disclosures a positive in that we believe we are one step and perhaps two or three steps closer in reaching a resolution on its options investigation," said Wu.

The Cupertino, Calif.-based iPod maker also admitted that chief executive Steve Jobs was aware of "a few" of those favorable grants, but said he was not aware of the accounting implications.

"To us, this sounds very similar to Hewlett-Packard where Mark Hurd admitted he was aware of the investigations, but was not aware that the activities were potentially illegal," Wu added. "Regardless of the outcome and as we have mentioned before, we continue to believe that even in the worst case scenario where Apple is guilty of improper options grants, we do not believe Steve Jobs is liable, the reason being the compensation committee at Apple is run by an independent board that is not comprised of employees of Apple."

As part of its disclosure Wednesday, Apple also mentioned it has "serious concerns" regarding two unnamed former executives who may be responsible for the counting, recording, and reporting of questionable stock options grants.

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Former General Counsel and Secretary, Apple Computer, Nancy Heinen.

"From our assessment, we believe the executives could be former CFO Fred Anderson, who resigned from the Board of Directors, and former general counsel Nancy Heinen," Wu told clients.

Heinen, who abruptly turned in her resignation from Apple in May, is the only former company executive reported to have independently sought legal counsel as a result of the ongoing options scandal. In August she obtained the services of 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 in the event of a government investigation.