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SEC To Investigate Apple's Disclosures Regarding Jobs' Health?

Unspeaked

Unspeaked

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Original poster
Dec 29, 2003
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Looks like the SEC is checking out Apple's recent string of communications concerning Steve's health... as the article clearly states, there's no reason to assume any wrong doing, it's just a routine check, but interesting no less...

LINK

The Securities and Exchange Commission is looking into how Apple Inc. disclosed news about CEO Steve Jobs' health problems, according to reports.

Bloomberg News on Wednesday said regulators want to make sure investors were not misled over the months between when he appeared gaunt at a public appearance earlier this year and when he announced a leave of absence last week. It cited an unnamed person familiar with the matter who said that the review does not mean the SEC has any evidence of wrongdoing by Apple.

Bloomberg also reported last week that Jobs is considering a liver transplant because of complications from treatment for cancer, citing unnamed people who it said are monitoring his illness.

Jobs at first this month said he was seeking a "relatively simple" treatment for a nutritional ailment. A little over a week later, he announced a five-month medical leave, saying his health issues were "more complex." He was treated for pancreatic cancer in 2004.

Apple stock has declined 8.4 percent since the news of Jobs' medical leave, and dropped $4.13, or 5 percent, to $78.20 Tuesday. The company is scheduled to report earnings after the market closes on Wednesday.
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Article Link
https://www.macrumors.com/2009/01/21/sec-to-investigate-apples-disclosures-regarding-jobs-health/
fleshman03 said:
I wonder why the SEC would bother with an investigation if they thought there was no fault...
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They may have been requested to do so by a large number of shareholders.

Or, it may just be a routine thing.

(If it's the former, I don't know if that may be a harbinger of a class action lawsuit...)
 
The SEC may very well believe that there is no fault, but I've heard a few people rumbling that they think Apple may have known more and was managing the press releases to manipulate the stock prices.

There may be some wrong doing, but to be honest I'm not sure how they'd find it. Steve Jobs's medical status is something he does not have to disclose completely to his employer, nor do they need to know all of the details.

They can only release what they are told by Steve, and even if he was lying, it's not ours, nor is it the company's business to know details of his medical status and they can only know what he shares. Without breeching Doctor Patient confidentiality I don't think there's any way to prove what Steve knew and when he knew it.
 
This investigation can me seen as necessary after Apple's stock options back-dating scandal. I, too, would be worried about how Apple conducts their business as it relates to their stock.
 
atszyman said:
They can only release what they are told by Steve, and even if he was lying, it's not ours, nor is it the company's business to know details of his medical status and they can only know what he shares. Without breeching Doctor Patient confidentiality I don't think there's any way to prove what Steve knew and when he knew it.
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I think the problem would be more with Apple knowing what was going on with Steve's health and intentionally misguiding investors.

If they related everything they were told by Steve as they were told it, there shouldn't be an issue. But if it turns out that they smudged things a little to lighten the blow, or withheld conflicting information, it wouldn't look very good.

And here's another link that focuses more on the lawsuit aspect...

Steve Jobs lawsuits face tough odds

The report Wednesday that the Securities and Exchange Commission is looking closely at Apple’s disclosures about the state of Steve Jobs’ health follows speculation last week that stockholders are also likely to file lawsuits against the company.

The issue, of course, is whether Apple and Jobs misled investors by issuing first good news (”hormone imbalance“) that drove the stock up, followed by bad news (”medical leave“) that drove it down.

But even if Jobs has been less than forthcoming about his health problems — as many doctors suspect — legal experts say that neither the SEC probe nor any investor lawsuit is likely to get very far.

Even the sources quoted by Bloomberg News, which reported the SEC rumor, say that the commission would have a tough time bringing a case against Apple. According to Peter Henning, a former SEC prosecuter, it would have to prove that the company tried to benefit by withholding information about an unambiguous diagnosis.

Former SEC commisioner Joseph Grundfest takes an even dimmer view of suits filed on behalf of investors or speculators who lost money in the see-sawing stock price.

“I never underestimate the cleverness of plaintiffs attorneys,” he told Reuters. “But I personally am aware of no theory that would support a filing of a case.”
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Unspeaked said:
I think the problem would be more with Apple knowing what was going on with Steve's health and intentionally misguiding investors.

If they related everything they were told by Steve as they were told it, there shouldn't be an issue. But if it turns out that they smudged things a little to lighten the blow, or withheld conflicting information, it wouldn't look very good.
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What did they know? When did they know it? What did they do do with knowing what they knew?

Those are the questions at the SEC can look at.
Note: They is defined by Apple.
 
Unspeaked said:
I think the problem would be more with Apple knowing what was going on with Steve's health and intentionally misguiding investors.

If they related everything they were told by Steve as they were told it, there shouldn't be an issue. But if it turns out that they smudged things a little to lighten the blow, or withheld conflicting information, it wouldn't look very good.
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Which is exactly what I said in my brief introduction. Of course if there's no whistle-blower then all they have to do is claim they relayed what they were told and Steve would say the same. Beyond that you start getting into personal culpability on Steve's part if he was intentionally withholding information to manipulate the stock price. But once again it's a who knew what, when? type question that we cannot know without violating Doctor/Patient confidentiality.
 
From Steve's letter on January 5, 2009:

The remedy for this nutritional problem is relatively simple and straightforward, and I’ve already begun treatment.

And from Steve's letter on January 14, 2009:

In addition, during the past week I have learned that my health-related issues are more complex than I originally thought.

It seems like this whole thing comes down to whether or not the SEC believes that Steve was lying when he used the word "thought." Lame.
 
I think Sharp hit the nail on the head:

Public neurosis about bad corporate behavior is spilling over on Apple, which is one of a relative handful of companies still profiting and driving innovation in this deepening recession. Pointless distraction...
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And Deinhart's comment only reinforces that view:

What’s amping up our skepticism is all those other business failures in the general market.
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So Apple is doing well financially when other tech companies are struggling, and the SEC thinks there's something wrong with that? Maybe Deinhart needs to start using Apple products. Then maybe he'll understand why they're doing better than average.
 
Kingsly said:
So Apple manipulated stock prices by discussing Steve's health, and then a few days later announcing he will be taking a leave of absence? Don't you usually manipulate stock prices with the intent of making them go up?:rolleyes:
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Just the opposite. The SEC thinks Apple may have been covering up the severity of the situation before the second letter in order to keep the stock up for a while.
 
jayducharme said:
So Apple is doing well financially when other tech companies are struggling, and the SEC thinks there's something wrong with that?
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Are you saying that because a company is doing well financially, that should somehow place them above legal oversight?
 
atszyman said:
Which is exactly what I said in my brief introduction. Of course if there's no whistle-blower then all they have to do is claim they relayed what they were told and Steve would say the same. Beyond that you start getting into personal culpability on Steve's part if he was intentionally withholding information to manipulate the stock price. But once again it's a who knew what, when? type question that we cannot know without violating Doctor/Patient confidentiality.
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Yes, I think what it will end up coming down to is what exactly is on record and from whom.

You'd think at least some of this relaying of information would be put down on paper or digitally, but who knows - maybe after that backdating scandal, they conduct more of their business verbally?
 
Just because they are driving innovation and profitable, it doesn't mean they are exempt from federal oversight. Everyone thought Bernie Madoff was a brilliant investor....how'd that turn out for the folks who invested $50b + with him.
I really don't see this as a pointless investigation. If Apple/Jobs is telling the truth, then they have nothing to hide and the SEC won't find a smoking gun. Unfortunately, the culture of secrecy at Apple makes them a big target and all the cloak & dagger press releases re: Jobs health doesn't instill confidence for their shareholders. If I owned a sizable chunk of Apple stock, I'd want to know what was going on too.
 
Kingsly said:
Don't you usually manipulate stock prices with the intent of making them go up?:rolleyes:
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I guess the accusation in this case would be that they manipulated stock prices with the intent of preventing them from going lower.

Edit: What Peace said.
 
personally, i think it's just the SEC doing it's due diligence.
They probably review other companies' CEOs as well, but due to Apple's popularity, it's more of a story.
 
SEC To Investigate Apple's Disclosures Regarding Jobs' Health?



The U.S. Securities and Exchange Commission (SEC) is planning to review Apple's disclosures about Apple CEO Steve Jobs's health problems, according to Bloomberg.

People familiar with the matter are quick to note a review does not necessarily indicate the SEC has seen evidence of wrongdoing. However, many Apple investors have been frustrated with Apple's limited and contradictory disclosures regarding the issue, specifically regarding statements made on January 5th and January 14th. The SEC will likely be looking into those statements' effect of causing fluctuations in the company's stock price:

To bring any case, the SEC would probably have to show the company tried to benefit by withholding information about an unambiguous diagnosis, said Peter Henning, a former federal prosecutor and SEC lawyer who now teaches at Wayne State University Law School in Detroit.

"It would be difficult, and certainly a new area of the law," Henning said. “You would have to pin down exactly what they knew, and with a health issue -- unlike a merger or a decline in revenue -- it's not subject to definitive answers."
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Article Link: SEC To Investigate Apple's Disclosures Regarding Jobs' Health?
 
Not sure they have much of a case with this, given that health is involved. Things most certainly can change over the course of a couple days or even minutes for that matter with doctors.

Why not investigate some of these muck journalists and analysts that seem to be doing all they can to fluctuate the price?
 
MadDog31 said:
Not sure they have much of a case with this, given that health is involved. Why not investigate some of these muck journalists that seem to be doing all they can to fluctuate the price?
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Bloomberg does seem to have a keen interest in digging has hard as they can into the story. However, that is what journalists do, though when it gets to a certain point I don't think it's ethical, but I suppose that's a different discussion.
 
Hopefully they dredge up something like the doctors requesting he take some time off to focus on his health.

Something they do every now and then for high profile patients.
 
I think we can all agree this is interesting. There have been a lot of posts here saying "the CEO's health is nobody's business." That may be, but, obviously Apple has some explaining to do for one reason or another. They seem to be speaking to the SEC a bit more than the average company? (or rather, the SEC is coming to speak to them)...
 
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