“U.S. regulators are examining Apple Inc.’s disclosures about Chief Executive Officer Steve Jobs’s health problems to ensure investors weren’t misled, a person familiar with the matter said,” David Scheer and Connie Guglielmo report for Bloomberg.
“The Securities and Exchange Commission’s review doesn’t mean investigators have seen evidence of wrongdoing, the person said, declining to be identified because the inquiry isn’t public,” Scheer and Guglielmo report.
“Investors have been pressing for information on Jobs’s health since June, when he appeared noticeably thinner at an Apple event. The company’s stock whipsawed this month after Jobs, who battled pancreatic cancer in 2004, said he would remain CEO while seeking a ‘relatively simple’ treatment for a nutritional ailment. Nine days later, Jobs said he would take a five-month medical leave after learning his health issues were ‘more complex,'” Scheer and Guglielmo report.
“‘The good news flipped by the bad news makes one wonder what Apple knew,’ said James Cox, a law professor at Duke University in Durham, North Carolina. ‘It’s not surprising for the SEC to come in and look afterward, given the pressure and publicity regarding their handling of a lot of cases,’ such as criticism of the SEC’s response to Bernard Madoff’s alleged $50 billion Ponzi scheme,” Scheer and Guglielmo report.
“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,” Scheer and Guglielmo report. “‘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.'”
“Corporate governance experts say shareholder interest in Jobs is unusually high because he is considered synonymous with Apple. He returned as CEO in 1997, turning the once-unprofitable maker of Macintosh computers into a successful consumer- electronics company with the iPod media player and iPhone. Jobs established himself as the face of Apple, serving as the main pitchman at every major product announcement over the past decade while yielding little time to other top executives,” Scheer and Guglielmo report.
MacDailyNews Note: Steve Jobs has never appeared in an Apple commercial.
Scheer and Guglielmo continue, “Apple’s board may have met its obligations to shareholders by notifying investors that Jobs will be on leave, said Edward Smith, a corporate governance expert at Chadbourne & Parke in New York… The board isn’t obligated to provide specific details about the nature of Jobs’s illness, Smith said. ‘It’s really an issue of the ability of the CEO during the period of his ill health to continue to advise and consult and manage the affairs of the company,’ he said. ‘Someone might be able to do that from a hospital bed for several weeks just as well as they may do it from the office.'”
Full article here.
MacDailyNews Take: Besides the point that there’s nothing there — doctor’s can and do change their minds and modify diagnosises over the course of minutes, to say nothing of days, weeks, months, or years — the current SEC couldn’t investigate its way out of a wet paper bag. The SEC ought to be investigating “analysts” who attempt to manipulate prices rather than analyze companies and bring back the Uptick Rule immediately which would go a long way towards decreasing the negative manipulation of stocks based on rumors and intentionally misleading “analysis.”