Apple's former chief lawyer, Nancy Heinen, will pay $2.2 million (£1.18 million) to settle a charge of stock option fraud, in a deal with the US Securities and Exchange Commission (SEC) that appears to end the regulator's pursuit of the iPod maker

The SEC had previously settled with the company's former chief financial officer, Fred Anderson, who agreed to pay $3.5 million.

The two agreements with the former Apple employees leave the company's co-founder and chief executive, Steve Jobs, unscathed.

Ms Heinen, a long time associate of Mr Jobs, who had once worked with him at Next Computer, also agreed to be banned from serving as a director or officer of a listed comapny for five years. She did not admit or deny the SEC charges.

The charges relate to two large options granted to senior executives at Apple, including 7.5 million options granted to Mr Jobs in December 2001.

The SEC said Ms Heinen caused Apple to fraudulently backdate the two large tranches of options - a February 2001 grant of 4.8 million options to Apple’s executive team, including herself, and the December 2001 grant to Jobs.

According to the SEC, it means that Apple should have reported $40 million more of costs.

Backdating of options is not itself illegal, but the practice does allow companies to increase stock option profits because their grant date is pushed back to a point where the prevailing share price was low.

Companies must also take a charge to cover the costs of any backdating at the time it is conducted.

Apple did not comment, although the company did take an $84 million charge in 2006 to cover improperly backdated stock options dating back a decade.

Times Recommends

• Calls grow for steep rate cut as services deteriorate
• Stagecoach shares fall 20% on rail warning
• UK broadcasters web TV 'limits competition'