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A federal prosecutor on the team investigating options backdating at Apple, the computer maker, is leaving government service for a job with a private white-collar law firm.
The departure of Chris Steskal, a member of the federal task force that brought the first charges in options backdating in August, comes days after his boss, Kevin Ryan, the US attorney for northern California, became one of several top federal prosecutors to announce that they would be leaving office.
The twin losses may interrupt the US government’s effort to crack down on backdating. The justice department and the Securities and Exchange Commission are already struggling to keep up with hundreds of backdating cases.
A spokesman from the US attorney’s office in northern California said the investigations into options backdating would continue in spite of the departures.
“US Attorney Ryan is taking care to ensure a smooth transition in the office’s cases,” the spokesman said. “There continue to be many assistant US attorneys with strong investigative skills and substantial trial experience on the stock options backdating task force and throughout the office, who are fully capable of carrying on the work of the task force.”
More than 160 companies are under scrutiny for improper options backdating, in which companies use hindsight to fudge options grant dates in order to inflate their value. Although backdating itself is not illegal, it can fall foul of securities laws if not properly disclosed. It also creates accounting problems.
Federal prosecutors and the SEC are actively investigating a backdated options grant to Steve Jobs, Apple’s co-founder and chief executive. Apple, which has turned the results of its own internal investigation into the matter over to federal authorities, has cleared Mr Jobs of any wrongdoing.
Meanwhile, dozens of top executives at other companies who knew about or engaged in improper dating of stock options grants have been sacked. Many companies have been forced to restate past earnings – some to the tune of hundreds of millions or even billions of dollars.
Mr Steskal is to join the law firm Fenwick & West. News of Mr Steskal’s departure was first reported on Friday by The Recorder, a publication covering the legal industry.