An internal investigation into the stock options scandal at Apple Computer has found that chief executive Steve Jobs was aware or recommended the selection of some favourable stock-option grant dates, but did not personally benefit.

Apple said today that the financial watchdog, the Securities and Exchange Commission and the US Attorney's Office have been informed of the results of its probe.

One option, granted to Mr Jobs for 7.5 million Apple shares on October 19 2001, was improperly recorded as being approved at a special board meeting, which did not occur. The company said that no "current member of the management" was aware of this irregularity.

The special committee also found that the investigation raised serious concerns regarding the actions of two former officers in connection with the accounting, recording and reporting of stock-option grants.

A three-month probe identified a number of grants for which grant dates were intentionally selected in order to obtain favourable exercise prices, the company said. Of 42,077 stock-option grants made on 259 dates between October 1996 and January 2003, 6,428 grants on 42 dates are not the proper measurement dates.

Of two option grants awarded to Mr. Jobs, the October 19, 2001 option was improperly granted with an exercise price of $18.03, instead of the correct date of Dececember 18, when Apple was trading at $21.01. This option was one of two cancelled without being exercised.in March 2003, some three years before the Securities and Exchange Commission announced its investigation.

The details emerged today in the company's filing with the SEC, which had been delayed by the special internal inquiry.

An investigative team spent over 26,500 'person-hours' searching more than a million physical and electronic documents, and interviewed more thann 40 current and former directors, officers, employees, and advisors.

The committee found that while there was no misconduct by current management, "the procedures for granting, accounting for, and reporting stock option grants did not include sufficient safeguards to prevent manipulation."

Former Vice President Al Gore, chairman of the special investigating committee, and Jerome York, chairman of Apple's Audit and Finance Committee, said in a joint statement: "The special committee, its independent counsel and forensic accountants have performed an exhaustive investigation of Apple's stock option granting practices.

"The board of directors is confident that the company has corrected the problems that led to the restatement, and it has complete confidence in Steve Jobs and the senior management team," the statement said.

Apple is among approximately 200 companies that have come under scrutiny for backdating stock options, a practice which involves assigning stock options to dates when the company's share price was lower in order to boost the recipients' award.

Dozens of companies have been forced to restate their earnings and reduce earlier recorded profits after stock option manipulations came to light.

Apple is restating financial statements from 2004-2006. In total, Apple is restating earnings after tax by $4 million in 2006, $7 million in 2005 and $10 million in 2004. The company also plans to take an $84 million non-cash charge as a result.

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