Jan. 12 (Bloomberg) -- Federal investigators want to question two former Apple Inc. lawyers about a backdated stock- option grant to Chief Executive Officer Steve Jobs, the Wall Street Journal reported, citing people familiar with the matter.

Apple shares fell 1.2 percent after the newspaper said investigators seek to interview Wendy Howell and former general counsel Nancy Heinen. Howell, who was dismissed by Apple last month, said Heinen instructed her to create false documents about the Jobs grant, the Journal reported.

The probe signals that authorities want to find out who in Apple's management may have authorized the backdating. The company last month said one grant to Jobs was recorded as approved at a special board meeting that never occurred, and that Jobs, 51, recommended favorable dates on options other than his own. Apple said it found ``no misconduct'' by Jobs.

``There will be an overhang on Apple stock until all the investigations into the options backdating are closed,'' said ThinkEquity Partners analyst Jonathan Hoopes in New York, who has a ``buy'' rating on the shares and doesn't own them. ``The main chapters on the issue are closed, but the book is still open.''

Apple spokesman Steve Dowling said the company has provided results of its internal investigation to the SEC and U.S. attorney. He declined to comment on Howell. An attorney for Howell didn't immediately return calls seeking comment.

`Flat Wrong'

Heinen's lawyer, Cristina Arguedas, issued a statement saying each of the option grants involving her client was authorized and approved by her superiors and none had a material impact on Apple's financial results or operations.

``Simply put, she committed no intentional wrongdoing in this matter and any rumors or innuendo suggesting otherwise are just flat wrong,'' the statement said.

Shares of Apple dropped $1.18 to $94.62 at 4 p.m. New York time in Nasdaq Stock Market composite trading. They have risen 27 percent since the start of 2006.

Investigators are focusing on 7.5 million options awarded to Jobs in December 2001 with a falsified October 2001 date, the Journal said. The backdating raised the grant's value and created a retroactive $20 million charge to the company.

Howell's attorney said she acted on instructions from company management, the newspaper reported.

195 Companies

Apple, maker of the iPod music player and the Macintosh computer, is among the largest of the more than 195 companies embroiled in the stock-options scandal that broke last year.

The company said on Dec. 29 that 6,428 options grants issued between 1997 and 2002 were backdated. Apple recorded $84 million in charges to correct its accounting for the backdated options, including the $20 million for Jobs' 7.5 million share award.

Prosecutors will want to know what Jobs, 51, was told in meetings and in telephone calls and if any advice was given to him by outside attorneys, said Robert Mintz, a white-collar criminal defense attorney in Newark, New Jersey, and former assistant U.S. attorney in New Jersey, earlier this month.

The investigation hits Apple at a time when the company's share are trading near a record, helped by an expansion into mobile phones. On Jan. 9, the company introduced the iPhone, based on its best-selling iPod, seeking to extend its dominance beyond music players. The shares rose 8.3 percent that day.

``Fundamentals for Apple are strong,'' Hoopes said. ``The options investigation is a backward-looking issue, and the company's share price is mostly based on the outlook.''

To contact the reporter on this story: Ville Heiskanen in New York at vheiskanen@bloomberg.net

Last Updated: January 12, 2007 16:39 EST