The Securities and Exchange Commission has dropped its stock option backdating case against Ann Mather, a Google Inc. board member since November 2005 and former chief financial officer of Pixar Animation Studios.
Her spokesman, Paul Kranhold, said the SEC sent a letter last week saying it was no longer pursuing the case, which it began in April 2008.
The SEC's Los Angeles office had said last year that it would recommend a civil complaint be filed against her for alleged stock option abuses that occurred during her five-year stint overseeing Pixar's books.
Emeryville-based Pixar was acquired by Walt Disney Co. for $7.4 billion in 2006.
The alleged practice, known as "backdating," involves retroactively setting the value of a stock option grant to the recipient's advantage.
If it's not properly disclosed, backdating options can exaggerate a company's profits and result in an underpayment of taxes.
A Google spokeswoman declined to comment. The SEC's Los Angeles office did not immediately respond to a request for comment.