Apple's Jobs Subpoenaed for Deposition, People Say
Sept. 20 (Bloomberg) — Apple Inc. Chief Executive Officer Steve Jobs was subpoenaed by the U.S. Securities and Exchange Commission to give a deposition in a backdating lawsuit against the company's former general counsel, two people familiar with the matter said.
Context & Ripple Effects
The subpoena puts Apple's sitting chief executive on the record in the SEC's civil case over stock-option backdating, which targets the company's former general counsel rather than Apple itself. The story traveled fast — Bloomberg's report was picked up the same day by the Wall Street Journal, Engadget, and Digital Daily, the last framing it squarely around Nancy Heinen, the ex-general counsel at the center of the suit.
Timing compounds the distraction: the subpoena surfaces in the same week that Apple cut iPhone prices, told customers SIM unlocks could brick their handsets, and fielded complaints about defective screens on early iPod Touch units. A governance probe aimed at the top now shares the news cycle with three product controversies.
First-order effects
- Jobs must sit for a sworn deposition in the SEC's backdating lawsuit against Apple's former general counsel, giving prosecutors direct access to the CEO's account of how the company's option grants were made.
- Apple has to manage shareholder-facing fallout from a subpoena of its CEO while simultaneously answering the iPhone price-cut backlash and iPod Touch screen complaints landing the same week.
Second-order effects
- Heinen's defense now has to plan around what Jobs says under oath, raising the stakes and likely the cost of the ex-general counsel's fight with the SEC.
- If the SEC is willing to depose Silicon Valley's most prominent CEO, other executives caught in the industry-wide options-backdating probes lose the argument that their own testimony is too disruptive to demand.
Third-order effects
- Deposing a sitting founder-CEO marks a shift in enforcement posture: backdating cases move from corporate settlements toward personal accountability for the people who signed off on grants.
- It also signals that boards can no longer treat a star CEO as shielded from regulators — a structural change in how concentrated executive power is treated when a company's paperwork turns out to be improper.
The trend: Options-backdating enforcement is climbing from the corporate level to individual executives, with the SEC showing it will put even iconic founder-CEOs under oath.