Did Apple's Ex-CFO Rat Out Steve Jobs?

Forbes has a cover story on how Steve Jobs got himself in hot water with the SEC over stock options. The magazine is part-owned by former Apple CFO Fred Anderson. Do the math.

Amid SEC charges that Apple management had shifted the dates of stock options to benefit executives, including Jobs, Anderson, and former general counsel Nancy Heinen, the company took an $84 million charge in 2006. Jobs and Apple settled a shareholder lawsuit for $14 million, but avoided trouble with the SEC. Anderson and Heinen paid $3.5 million and $2.2 million in fines respectively, without admitting guilt.

The episode caused a major rift between Anderson and Jobs. Anderson had left Apple in 2004, but stayed on the board until the scandal led to his resignation in 2006. In the meantime, Anderson had joined Elevation Partners, a private-equity firm in Silicon Valley. As the stock-options scandal grew, Anderson and Jobs pointed fingers at each other, at one point issuing dueling press releases shifting the blame. Anderson has long maintained that Jobs knew more about the options chicanery than he has let on.

Elevation, which also counts famed Valley investor Roger McNamee and U2 frontman Bono as partners, backed Palm, a rival to Apple in the smartphone business, and recruited a former top Apple executive, Jon Rubinstein, as Palm's executive chairman. No one in Silicon Valley honestly believes this is a coincidence.

Forbes is another Elevation investment. The May 11 story, written by Bill Barrett and teased on the cover, centers on the 118-page transcript of a three-hour interview Jobs gave SEC examiners trying a case against former Apple general counsel Nancy Heinen, which the magazine obtained at some difficulty through a Freedom of Information Act. In the interview with SEC examiners, Jobs complained that the board was not looking out for him and he had to ask for a generous stock-options package, but maintained that he was largely unaware of the backdating and ignorant of the accounting consequences. (Backdating is not illegal by itself, but requires notice to shareholders and a charge to earnings, neither of which Apple undertook at the time it backdated options.)

Excellent journalistic work on Barrett's part. But here's the question: How did Forbes know precisely which document to ask for? It always helps to have well-connected sources. And it's hard to imagine who would be better placed to know the details of the case than Anderson.