How Far Did the Apple Fall From the Tree?

It has enjoyed a relentless stream of success introducing products like the iPhone, services like the Application store and MobileMe, and a constant cycle of ever-improving computers.

But Apple Inc. has not been able to slam the door on the options backdating scandal that once threatened to force the company's top leadership, including guru/C.E.O. Steve Jobs, into the harsh glare of a Securities and Exchange Commission spotlight.

Until now. Nancy Heinen, who served as general counsel for Apple, agreed to pay a civil settlement worth $2.2 million, not be a public corporate officer for five years, and not be a practicing securities lawyer for three years.

The settlement announced today allows Heinen to not admit any wrongdoing, which is standard boilerplate for high-ranking company officers who are given an opportunity to settle with the S.E.C.

The facts of her case are still laid bare: Heinen was accused of backdating a total of 11.6 million options in two instances for both Jobs and Apple's executive team, and forging accounting records and board minutes to conceal the crime.

The backdating allowed the executives on the receiving end of the options to make even more money than they already would have -- the options were already in the black.

The difference between the profit the execs would've made at the lower option price, and what they would've, but did not make, at the higher option price, was $39.2 million.

Backdating the options allegedly allowed Heinin to not have to record that $40 million on the books.

And yet, the alleged duplicity, the revised accounting ledgers, the requests for her underlings to prepare forged documents, was essentially all for naught. Jobs and other current executives have avoided charges in the matter because they never exercised the now-suspect options.

A special committee of Apple's board has also internally cleared them of any wrongdoing.

Apple shareholders surely hope Heinen's settlement is the last they hear of backdating going on at the digital lifestyle juggernaut, unless it has something to do with some new feature in OS X's automated backup program, Time Machine.

by Paul Smalera