Apple's Disclosures Regarding Jobs' Health Remain Under Scrutiny by SEC

[MacRumors]

Bloomberg reports that the U.S. Securities and Exchange Commission is continuing to investigate Apple's disclosures regarding Steve Jobs' health during the early January period leading up to the announcement that Jobs would be taking a six-month medical leave of absence. The report is a follow-up to Bloomberg's January report about the investigation.

"The issue here is: Did Apple or Jobs make misleading disclosures, tested by what they knew at the time?" said Robert Hillman, a securities law professor at the University of California, Davis. "A disclosure could be misleading if it's a partial truth."

Whether the SEC will ultimately be able to take action against Apple or Jobs is unknown, given the uncertainty about the situation and the "murky" laws regarding disclosure of the health of companies' CEOs. Regardless of the extent to which a company has a duty to reveal health matters, it is clear that once a company chooses to speak about an issue, it must do so truthfully.

While there has to be some measure of confidentiality around the health of executives, any disclosures need to be accurate and complete, said Jahan Raissi, a former SEC enforcement attorney.

"Once you open your mouth and start to speak on a topic, you have to say something completely truthful," said Raissi, who is now a partner at Shartsis Friese LLP in San Francisco. "If what you omitted is material, that’s a problem."

On that basis, the SEC is focusing its inquiry on what events may have transpired between January 5th, when Jobs and Apple announced that he was suffering from a "hormone imbalance" for which the treatment was "relatively simple" and January 14th, when Jobs announced that he was taking a leave of absence due to the medical issue being "more complex" than originally thought.

Jobs' health issues ultimately required him to undergo a liver transplant, although he was still able to meet his stated timeline in returning to work by the end of June.

Article Link: Apple's Disclosures Regarding Jobs' Health Remain Under Scrutiny by SEC

[DeathSticks]

Poor Steve

[Tenebrous]

Clearly the FEC has no bigger fish to fry than to spend time on a nine-day period of time some months ago, right? Right? Freakin' bureaucratic kleptomaniacs.

[maclancer]

Apple should disclosure Jobs' Health from the beginning, now they are in hot waters with the government.

[NT1440]

I like how people care more about money than others personal privacy. THINK OF THE SHAREHOLDERS!

[iGary]

Originally Posted by NT1440

I like how people care more about money than others personal privacy. THINK OF THE SHAREHOLDERS!

He gives up some of his privacy as part of the position he is in. He can leave the company at any time if he doesn't like his health being in the limelight, so he did.

[windywoo]

Originally Posted by NT1440

I like how people care more about money than others personal privacy. THINK OF THE SHAREHOLDERS!

Personal privacy would be whether he likes boys or not. This is his health which affects business. And do you think Apple's motivation for not disclosing was to protect his privacy?

[gnasher729]

Originally Posted by maclancer

Apple should disclosure Jobs' Health from the beginning, now they are in hot waters with the government.

In hot waters with the same SEC that ignored how many reports of massive fraud in the Madoff case?

Originally Posted by pdjudd

If it involved any sort of fraudulent behavior that affects the way investors would handle stock from a company? Yes, the SEC has lots to say on that. If they feel that there is a legitimate complaint, it is their obligation to investigate.

Apparently they didn't feel that Madoff had to be a fraudster...

[kingtj]

The only way to be SURE they don't get in any legal problems with the govt. is to say absolutely NOTHING.

Ironically, many of the same people throwing a fit about the "partial truths" they supposedly heard about Jobs' health are the ones who'd throw at LEAST as big a fit if Jobs suddenly went away for a while, with Apple simply repeating a line of "No comment" whenever asked about it!

Originally Posted by maclancer

Apple should disclosure Jobs' Health from the beginning, now they are in hot waters with the government.

[pdjudd]

Originally Posted by Tenebrous

Clearly the FEC has no bigger fish to fry than to spend time on a nine-day period of time some months ago, right? Right? Freakin' bureaucratic kleptomaniacs.

If it involved any sort of fraudulent behavior that affects the way investors would handle stock from a company? Yes, the SEC has lots to say on that. If they feel that there is a legitimate complaint, it is their obligation to investigate.

Of course that being said, the chances of anything comming out of this is very nebulous at best. It isn't clear about how CEO's are required to disclose about their health - especially when they are on leave from the company. Plus consider the very volatile nature of the stock market and the stock of Apple has historically been. Finally throw in the fact that Jobs and his doctor are probably the only ones capable of knowing what really was going on during that 9 day period - very brief. Jobs' doctors are covered from disclosure by HIPPA unless Jobs releases them from that obligation.

This is a very nebulous affair that I feel that the SEC will abandon after they realize that they either don't have standing or there just isn't enough evidence to peruse much less prosecute on.

[kernkraft]

Originally Posted by pdjudd

If it involved any sort of fraudulent behavior that affects the way investors would handle stock from a company? Yes, the SEC has lots to say on that. If they feel that there is a legitimate complaint, it is their obligation to investigate.

Of course that being said, the chances of anything comming out of this is very nebulous at best. It isn't clear about how CEO's are required to disclose about their health - especially when they are on leave from the company. Plus consider the very volatile nature of the stock market and the stock of Apple has historically been. Finally throw in the fact that Jobs and his doctor are probably the only ones capable of knowing what really was going on during that 9 day period - very brief. Jobs' doctors are covered from disclosure by HIPPA unless Jobs releases them from that obligation.

This is a very nebulous affair that I feel that the SEC will abandon after they realize that they either don't have standing or there just isn't enough evidence to peruse much less prosecute on.

I completely agree about the seriousness of the matter. In fact, I think the way, Apple dealt with the situation is disgraceful. They are a public company and have strictly regulated responsibilities towards their shareholders. Shareholders own the company, the management's power originates from them, there would be no shiny overpriced and noisy MacBook with or without Firewire, if some people did not put their money behind the company. Jobs, as a CEO, even when retired played and will play a major role in the company. It is their duty to tell me, an occasional Apple shareholder, if there is a problem and I can make adjustments. For example, sell and not pocket huge losses.

Perhaps, some investors will prove that they suffered losses due to Apple's misrepresentation of Jobs' health. After all, there is a legal obligation to disclose medical details about top managers' health and not to do so may attract not just criminal charges but civil litigation too. I really hope, that Apple will be penalised for the incident. It is time to kill that culture of fear and secrecy that Jobs is responsible for. It is a bit dated now and personally, I cannot see, how it benefits the consumer. All the usual quality problems about the iPhone and MacBooks, I think support the theory.

This whole incident should be seen in the light of Apple's uniqueness about its shareholders. From time to time, Apple is being saved by people, who believe in the company and don't sell, when every sane person would. Is this secrecy the way to pay back the favour?

But I agree that they might get away with it this time. Rotten Apple!

[Mattie Num Nums]

Originally Posted by kernkraft

I completely agree about the seriousness of the matter. In fact, I think the way, Apple dealt with the situation is disgraceful. They are a public company and have strictly regulated responsibilities towards their shareholders. Shareholders own the company, the management's power originates from them, there would be no shiny overpriced and noisy MacBook with or without Firewire, if some people did not put their money behind the company. Jobs, as a CEO, even when retired played and will play a major role in the company. It is their duty to tell me, an occasional Apple shareholder, if there is a problem and I can make adjustments. For example, sell and not pocket huge losses.

Perhaps, some investors will prove that they suffered losses due to Apple's misrepresentation of Jobs' health. After all, there is a legal obligation to disclose medical details about top managers' health and not to do so may attract not just criminal charges but civil litigation too. I really hope, that Apple will be penalised for the incident. It is time to kill that culture of fear and secrecy that Jobs is responsible for. It is a bit dated now and personally, I cannot see, how it benefits the consumer. All the usual quality problems about the iPhone and MacBooks, I think support the theory.

This whole incident should be seen in the light of Apple's uniqueness about its shareholders. From time to time, Apple is being saved by people, who believe in the company and don't sell, when every sane person would. Is this secrecy the way to pay back the favour?

But I agree that they might get away with it this time. Rotten Apple!

I am glad there are people here that actually understand what a Public Companys relationship to their shareholders are, because some people here think that Steve is just another employee like the janitor.

[pdjudd]

Originally Posted by kernkraft

Perhaps, some investors will prove that they suffered losses due to Apple's misrepresentation of Jobs' health.

Actually I can't see how that will be proven due to the unstable nature of Apple's stock in general and the fact that overall, it went up in the last quarter. Its very hard to prove a loss due to a specific cause that happened over a 9 day period.

After all, there is a legal obligation to disclose medical details about top managers' health and not to do so may attract not just criminal charges but civil litigation too.

Actually, that area of law has not been established and several people has said it is murky at best. Of course we should point out that the procedure itself was done over a period of time when he was on leave (which was disclosed) and we are talking about the 9 day period of time in January - we also need to point out that things in the medical world change rapidly. From the OP:

Whether the SEC will ultimately be able to take action against Apple or Jobs is unknown, given the uncertainty about the situation and the "murky" laws regarding disclosure of the health of companies' CEOs.

Emphasis mine. You make it sound as if it is a certainty when there is no such certainty. Which is why my previous post was precluded with an IF. If Apple is guilty, they should pay. Right now, this is just an investigation that has some problems right off the bat and involves an area where things are not always black and white.

[MacCheetah3]

Hi
I still don't see the big deal, even for investors to know details of medical "issues". You're going to bail from any investments in the company if suddenly Steve comes down with cancer... Oh wait... It's fine if a company should divulge when a CEO 'steps out' for any kind of medical reason during a period but why really shouldn't be a big deal. Would you enjoy telling a ton of people about all of your medical issues? Apple's survived in Steve's absence before and they'll do it in the future.

[Pugpuppydude]

Dang.. I don't think he's going to be back. At least not like he was before, full time.

[Widowsoft]

I thought i had a cold which turned out to be hay fever sorry to those I said I had a cold

[nagromme]

I'm all for investigating to find OUT if something illegal was done, rather than just assuming either way. Apple should be held responsible if they've broken the law.

But some of the hollering seems to boil down to the premise that a patient's condition doesn't change over time, and that doctors don't do new tests or discover new information over time either.

But the fact is, doctors CAN determine something new--something they did not know a week (or an hour) before.

So if Apple makes one statement one week and an entirely new statement the following week, that's no more impossible than the DOCTOR making a new statement. Which happens all the time. The condition changes, or new test results come in, or whatever.

How much of those private records can be legally seized? I guess we'll find out.

[Schtumple]

Originally Posted by nagromme

I'm all for investigating to find OUT if something illegal was done, rather than just assuming either way. Apple should be held responsible if they've broken the law.

But some of the hollering seems to boil down to the premise that a patient's condition doesn't change over time, and that doctors don't do new tests or discover new information over time either.

But the fact is, doctors CAN determine something new--something they did not know a week (or an hour) before.

So if Apple makes one statement one week and an entirely new statement the following week, that's no more impossible than the DOCTOR making a new statement. Which happens all the time. The condition changes, or new test results come in, or whatever.

How much of those private records can be legally seized? I guess we'll find out.

Exactly, to me it does sound entirely plausible that at one point, that's all it looked like, and that was certain (at the time), then some more test results came in that said otherwise, and Apple rightly changed it's line, after this point Steve was on leave, it's kinda (and I mean KINDA) like saying Apple is at fault for not telling people about something that happened to Woz

[08Hawks]

Anyone heard of HIPA, this should apply to everyone !!!!!! Including Steve .....

Hey, don't we need a little bit more government control over our lives ????? (sarcasm) ....!!!!!!!

The SEC has not done there so called job for years with the large corporations unless they can benefit...... Now these morons want to control the live of the executives as well as the business's......

Sorry for the rant , just tired of our government getting involved in our lives and not allowing us to be grown ups and take care of ourselves.....

[krye]

So what's the problem? Jobs is back in the house. The stock didn't tumble. The SEC needs to shut the f up and find some better way to spend their time and money.

[frjonah]

I think the SEC has every right to look into Jobs because, after all, we wouldn't want to have any risk in investing, now would we? Furthermore, I think that Jobs should be required to contact the SEC every time he gets into his car because his risk of death will be going up, and we all have a right to know that. The same goes for, well, eating, exercising and using PCs because, as we all know, these things can increase the risk of choking and/or stroke. Come to think of it, the only fair solution to the investors is to have a live web-feed of Steve's life so we can make intelligent decisions on the basis of his behavior.

The "Free Market" definitely has to be totally controlled by infallible government to remain free... that's, like, obvious and stuff.

...am I the only one that is shocked by this rubbish?

iona

Steve, get better and don't worry about ANYTHING but your health right now!

[DELLsFan]

Originally Posted by MacRumors

...Regardless of the extent to which a company has a duty to reveal health matters, it is clear that once a company chooses to speak about an issue, it must do so truthfully...

This is the crux of the matter.

Originally Posted by NT1440

The two matters are separate even though you through them under the umbrella of "personal health matters."

It's called irony. Very few are able to identify it. Those that can and disagree, often use a strawman argument to dilute the effect. I happen to share pavelbure's wonder on the matter.

[ULFoaf]

I have little doubt they misled the public about Job's health.

I doubt there will be much action unless someone proves they lost a lot of money because of this misleading. The irony? They would likely have lost more if they said "Steve Jobs has severe health problems causing him to lose weight" and even more later when they said "Steve has to take some time off so he can have a liver transplant."

Such is the stock market - if people believe rise/falls will happen, they take actions that often make it come true. Jobs is sick? I'm selling my Apple stock before it drops! When enough people do this, it of course does drop.

[iSee]

The SEC is blowing smoke here. They've been asleep at the wheel while the Madoff ran a massive ponzi scheme under their noses (despite being tipped off repeatedly over the years) and while the rating agencies they regulate helped create the global financial meltdown by certifying mortgage-backed securties as AAA investments.

Hey SEC, quit quibbling over the wording of disclosure statements and start doing something useful. These guys are out investigating parking violations while the bank is getting robbed.

[Victor Odin]

Originally Posted by iSee

The SEC is blowing smoke here. They've been asleep at the wheel while the Madoff ran a massive ponzi scheme under their noses (despite being tipped off repeatedly over the years) and while the rating agencies they regulate helped create the global financial meltdown by certifying mortgage-backed securties as AAA investments.

Hey SEC, quit quibbling over the wording of disclosure statements and start doing something useful. These guys are out investigating parking violations while the bank is getting robbed.

Just curious. If it was a key member of Microsoft or Dell that was being investigated, would your position be the exact same?