by , 1:45 PM EDT, June 4th, 2008
Despite continued SEC action against some Apple and Pixar employees, Steve Jobs himself is not likely to face a government lawsuit over stock back dating, according to Reuters. The stature of Steve Jobs may give the government pause.
In addition, Mr. Jobs appears to have a strong case in that he may not have understood the legal implications of the backdating, a process that is illegal if not properly accounted for. In addition, he had board approval and internal audits cleared Mr. Jobs. As a result, the government is more likely to go after those whose case would be a slam dunk.
"You cannot discount the fact that Steve Jobs is an immensely well-known and well-respected icon of American business," said Anthony Sabino, a law and business professor at St. John's University. "The government is very interested in the public opinion of the ... people who sit in the jury box," Sabino added. "If I was a prosecutor for Justice [Dept.], I would think about that."
Marc Fagel, the director of the SEC office in San Francisco said in an interview that they need to look for more than negligence. "Do we need to sue hundreds of executives for being negligent?" he asked. "We have to bring cases we think we will win in court," Fagel added.
Compared to other backdating cases the SEC is pursuing, for example, Broadcom, the impact of Apple's case is much smaller.
Even so, two advisors to Jobs, have been targeted by the SEC in addition to the previous action against former Apple CFO Fred Anderson and former General Counsel Nancy Heinen. They are former Pixar CFO Ann Mather and Larry Sonsini, a Pixar director whose law firm acted as the company's outside legal counsel.
In the case of Mr. Jobs: "In a large company, the financials are very complex and the CEO is not going through line by line to make sure everything is correct," said Phillip Stern, a former SEC attorney. "It is not something that would be readily apparent. If the board says everything is OK he has every reason to believe that is fine."