Oct. 5 (Bloomberg) -- Apple Computer Inc. Chief Executive Officer Steve Jobs apologized to shareholders and acknowledged that he knew some stock-option grants were backdated to inflate their value.

Apple said yesterday that an internal probe found grants were manipulated on 15 dates. Former Chief Financial Officer Fred Anderson resigned from the Cupertino, California-based company's board, citing Apple's best interests. Federal prosecutors in San Francisco are investigating Apple's backdating of stock options, a person familiar with the matter said.

The findings of the three-month probe may not shield Jobs, 51, from a deepening entanglement in the scandal. While he knew of some backdated options, he didn't benefit or understand related accounting issues that will likely lead to restatements, Apple said.

``We don't often see Steve Jobs apologize,'' said Rob Enderle, an analyst at the Enderle Group in San Jose, California. ``He was aware of the practice. He doesn't come away clean.''

Shares of Apple, maker of the Macintosh computer and iPod music and video player, fell 55 cents to $74.83 at 4 p.m. New York time in Nasdaq Stock Market composite trading. They have advanced 4.1 percent this year after more than doubling in 2005.

The U.S. attorney in San Francisco is looking into backdating at Apple and is focused on a few individuals, said a person familiar with the probe. The inquiry is in an early stage and it's too soon to determine the outcome, the person said.

Federal prosecutors and officials at the U.S. Securities and Exchange Commission met with Apple officials yesterday, said the person, who declined to be identified because the details of the investigation are confidential.

The Wall Street Journal reported on the investigation late yesterday, citing an unnamed person familiar with the probe.

Voluntary

``Apple voluntarily notified the SEC and continues to proactively notify the SEC about its investigation,'' said Apple spokesman Steve Dowling in an interview. Luke Macaulay, a spokesman for the U.S. attorney in San Francisco, declined to comment.

Jobs in the statement called the problems ``completely out of character for Apple'' and promised to ``ensure that this never happens again.'' The actions of two unnamed former officers raised ``serious concerns,'' the company said.

Apple's announcement yesterday ``removes a lot of the concern that it could be more broad,'' said James Grossman, a fund manager at Thrivent Financial for Lutherans in Appleton, Wisconsin. The firm oversees $65 billion including Apple shares. ``It doesn't change how many iPods or MacBook Pros they're going to sell.''

Disclosed in June

Apple disclosed the investigation in June, saying it was probing grants made from 1997 to 2001, including one awarded to Jobs. More than 140 companies have said their options grants were the subject of either internal or federal inquiries, or both, to see if grant dates were manipulated to benefit employees.

Jobs wasn't aware of any irregularities in any grants that were made to him, Dowling said.

Independent auditors are reviewing the findings of the company's probe and Apple said it will likely restate results to record costs related to the grants. The company said it still hasn't determined the amount of the charges and continues to work with the SEC.

Jobs, who helped start Apple in 1976 and returned to run the company nine years ago, was aware that favorable grant dates had been selected in ``a few instances,'' the company said.

`Entirely Reasonable'

``For Steve Jobs to assert that he deferred to qualified lawyers and accountants on the rules governing the issuance of options is entirely reasonable,'' said Jacob Frenkel, a former SEC lawyer now in private practice at Shulman, Rogers, Gandal, Pordy & Ecker in Rockville, Maryland. ``I don't think you would expect him to know the rules.''

Losing Jobs would be a blow to Apple because of his role as a product visionary and architect of the company's current revival. He oversaw development of the iPod in 2001 and is credited with the stock's nine-fold increase in the past five years. Enderle said he doesn't expect Jobs, who he called the ``Teflon CEO,'' to have to leave the company.

``I just don't think people would think Apple's better off without him,'' Enderle said. ``He was right to apologize. There's little likelihood that his job is at risk.''

Probes have cost some 20 executives and directors their jobs at more than a dozen companies. They include Gregory Reyes, ex- CEO of San Jose, California-based Brocade Communications Systems Inc., the world's largest maker of switches for storage networks, and Kent Roberts, former general counsel at McAfee Inc., the Santa Clara, California-based maker of anti-virus software.

Facing Criminal Charges

Five former executives at two companies face criminal charges, including Reyes and Jacob ``Kobi'' Alexander, former CEO of New York-based Comverse Technology Inc.

Anderson joined Apple as CFO in 1996 and retired in June 2004. He helped start and is a managing director at Elevation Partners, a venture capital firm in Menlo Park, California, whose partners include Bono, the lead singer of rock band U2.

He is also a director of EBay Inc., the world's largest online auctioneer. EBay spokesman Hani Durzy hasn't responded to a request yesterday for comment.

Vested options let holders buy shares at a later date, usually at the market price the day they were granted. Backdating to days with lower prices can give holders a built-in profit if the shares rise. If not properly disclosed, the practice may break laws because it can hide compensation costs from shareholders and regulators.

``This is a combination of greed and just a lack of understanding of what were very confusing rules,'' Enderle said.

To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net; Jonathan Thaw in San Francisco at jthaw@bloomberg.net

Last Updated: October 5, 2006 21:08 EDT