“Even though Steve Jobs founded and managed Apple into arguably the world’s most successful company, Tim Cook has been more than just a steward of Apple’s growth. He has been a skilled, decent and otherwise strong CEO,” Ray Hennessey reports for Entrepreneur. “Which is why it’s such a head-scratcher he’d make a blunder even penny-stock CEOs know to avoid.”
“Amid the market turmoil early today, Cook responded to an email from CNBC personality and host Jim Cramer, specifically talking about China. Fellow CNBC host Carl Quintanilla did what all good journalists would do and reported the reply,” Hennessey reports. “Trouble is, Cook’s note very likely violates Regulation Fair Disclosure (Reg FD), the Securities and Exchange Commission rule that prevents executives from publicly traded companies from disclosing business conditions to one set of investors and not others.”
“Cook clearly made a selective disclosure in his email to Cramer and gave valuable financial information,” Hennessey reports. “Regulators tend to enforce rules based on the impact the violation had. This wasn’t Tim Cook telling Jim Cramer he had Frosted Flakes for breakfast. This was indeed market-moving and gave an advantage to one Apple investor before anyone else in the world.”
Read more in the full article here.
MacDailyNews Take: Surely any sanctions will pale in comparison to the $63.384 billion in market value* that Cook’s email recouped.
*AAPL’s $103.12 close minus the $92 session low equals $11.12 per share multiplied by 5.7 billion shares outstanding or $63.384 billion.
Apple shares recover from white-knuckle plunge after CEO Cook emails Jim Cramer – August 24, 2015
Apple stages historic rally off $92 – August 24, 2015
Apple CEO Cook may have violated U.S. SEC rules with email to Jim Cramer – August 24, 2015
Apple, after big drop, leads recovery of Dow Jones Industrial Average – August 24, 2015
CEO Tim Cook to Jim Cramer: Apple is seeing strong growth in China through July, August – August 24, 2015
Apple crashes under $100 in pre-market trading as tech stocks set up for dismal day – August 24, 2015
Nonsense; it was de-facto public announcement made to media.
Just yesterday, friends of mine (to whom I give AAPL investment advice) came by my house to ask about AAPL’s recent decline (their last purchase was at $131.xx).
There is nothing in Apple’s fundamentals or FQ3 guidance to warrant this selloff. This selloff, as was the decline starting last April, has been caused by uninformed “journalists” speculating about stuff they know nothing about and publishing stories chock full of factual errors. They amplify the fears of investors just as ill-informed as themselves causing them to make irrational decisions.
TC provided factually correct information to a party he knew would decimate it quickly and broadly, that corrected the bullshit being passed off as “news” by hit whore rumor site/bloggers, without providing specifics that would later show up in a 10Q/8K.
TC didn’t benefit financially from this disclosure (he doesn’t own any AAPL), neither did Cramer (his charitable trust owns AAPL). But as Cramer said AFTER releasing the email, he’s going to go out and buy some AAPL at these prices.
Just like a bong is not drug paraphernalia, unless there is drug residue in it, “inside information” is not inside information if it isn’t used to make trades before the market has the same information.
The SEC, to keep up appearances, will look into this, but will do nothing.
I hope you are right.
It is fine for the SEC to look into Cook. What I would really like is for the SEC to look into those who were so quick to attack Cook. What do they stand to gain, or loose due to The TC comments. Were they possibly some of those drumming up negative “news”, news that Tim countered, and that could have influenced stock prices over the past few days? Something about the reporting of financial news over the past week smells very fishy, and the SEC should be looking into that.
I agree that a Bong needs residue to be paraphernalia, however, I certainly would not drink red wine out of a champagne flute, if ya know what I mean!
I agree. I don’t think there’s any chance that the spirit of the law was violated. However, given the abundant crony capitalism that’s been going on lately, look for the SEC to make Apple pay just because. Apple has been rather non-deferential to Obama, so I bet they end up paying.
If anyone is paying it will not be Apple.. It will be either of or both parties involved in the violation.. In this case Tim Cook and/or Jim Cramer.
Is Cramer not considered a journalist now? And if so, didn’t Cook basically just share some valuable investment information with the media? Which essentially disseminated the information right away? It seems to me that this was the opposite of insider information; it was the “outsider” information, if anything…!
Cramer is not a journalist. He’s an entertainer. He’s the Fox News-tainment (“We put the stain in newstainment”) of the financial news.
Guy works for NBC for a decade and you have to drag FOXNews into it?
Are you really that lame?
Or just stupid???
wouldn’t a report that was destined to be reported widely to the public( which after all the whole purpose of the exercise) be allowed provided Cramer did not buy stock ?
Someone is sure keen to cook COOK’s Goose! 🙂
Is Tim Cook Cooked? Or has he cooked his own Goose??! 🙂
Take a gander at you
The Cookie Sanction.
The parasitic incompetence of the SEC had better justify their pay and existence by focusing on the selloff of AAPL after a record quarter and earnings in addition to the ridiculous shorting options being sold.
No, the SEC is wasting taxpayers’ money by surfing porn sites all day, while they ignore people like Bernie Madoff for decades.
The existence of that agency is a net loss to the public, because people believe they’re doing their damned job, so they don’t bother with their own due diligence in evaluating investment opportunities.
Son, you’re not very savvy about what the government actually DOES all day, are you? LOL. And by the by, I can protect myself. So can most adults. I’m not so sure that we NEED any more protection, much less the kind that an enormous government can give us.
“… Surely any sanctions will pale in comparison to the $63.384 billion in market value* that Cook’s email recouped….” Not only that but it buoyed the rest of the market as well. How many other than Apple billions did that 63 millon save?
Came here looking for this post
Let’s just hope that the manipulation in play to drive the Apple Inc. stock down, did some real collateral damage to those very manipulators!!!
Cramer didn’t write to Cook as a single investor, he inquired as a journalist.
Cook didn’t responding to a single investor. He responded to a journalist.
If Cramer acted on journalistic information for personal gain before reporting it to the public, the SEC will “Cook” him. 🙂
While it can be hotly debated as to whether Cramer is a journalist or entertainer, Cramer certainly believes, and holds himself up to the public, as a news source for the general public. Therefore, his contacting Tim Cook was not as an *individual* investor, but rather as someone wanting information for his financial “news” reports. Tim Cook’s response to him was a response intended to be used for Cramer’s financial “news” reports.
Legally, it is no different than Tim Cook answering questions from a New York Times reporter.
This absolutely does not violate any SEC rules.
Unless that email was broadcast (cc’ed) to a large collection of journalists when he replied to Jim Cramer’s email the SEC still might have a case.
They’ll just fine AAPL $63 billion. Guvment tries to screw Apple any way they can. What’s the difference in this and Cramer having CEO’s on the show to say how great everything is and then Cramer touts the stock.
Apple did not gain $63 billion . . . nor did Cook. How can the fine either for that amount? How can they prove the sudden surge in AAPL is even associated with the news? The only way they can show any gain would be in sales or purchases Cramer might have made before he made the information public to affect the movement of AAPL one way or the other. If Cook did not sell, buy, or even incumber his holdings in any way in that short time, how has he gained or lost? Apple certainly hasn’t.
Hmm. This was NOT a Steve Jobs thing to do. However, if writing to Jim Cramer is not public disclosure, what is? Surely, Tim Cook wrote his reply to the public, knowing Jim Cramer discloses everything about Apple he can lay his hands on.
This will, no doubt be decided on the minutia of intention.
I wouldn’t know if Cook’s email violates SEC rules, but he was writing to a reporter, and both knew the content would be released publicly, so I can’t see the SEC making any kind of “insider” charge. The “many investors” line makes it clear that Cook was not sharing private information intended for Cramer only.
Competition won’t destroy Apple. The U.S. Gov will do the job instead.
Govt wants that back door to all Apple code very badly…
Every soul on the planet who has an interest has heard about it…
Leave it alone….there are more important issues to look after…
IE… Wallstreet manipulators !
Watch CNBC Mad Money tonight– Cramer provided the exact chronology on the TC email to wit:
Cramer emailed TC at 5:00 pm Sunday; TC responded to Cramer on Monday, 8:15 am EST.
I’m sure Cramer and TC et al ran the emails by someone at their respective legal advisorsl before discussing it on Opening Bell at 9:00 am EST where the info was released to the financial world……..
There ya go…..now the SEC CLown CAR can get back to Martha, Bernie, HF front running, naked short selling, insider trading and all the other assorted BS that goes on UNABATED DAILY screwing the retail investor for years………..but I digress………
If those are accurate times, and I have no reason to doubt them, Tim Cook’s email had no effect on the opening 92 quote for AAPL, ergo everyone who got the information had equal opportunity when Cramer revealed those data in his Opening Bell program at 9:00 AM. Tim Cook already knew those data and could take advantage of the release of the information. . . but that could happen on ANY release of data. There is no prohibition on release of financial data to any particular time, just that it be widely disseminated. That means it has to get into the hands of people WHO CAN widely disseminate it. Cramer meets that criterion.
What I see here is a sour grapes report from a RIVAL journalist at CNBC who is upset he was not considered important enough to get a personal email from the CEO of Apple. . . but then he doesn’t appear to have a program that is broadcast at the opening bell of the stock market either. So, do you give your general announcement to someone like Carl Quintanilla, the WEEKEND NEWS ANCHOR, who may report on it at some later time, or to someone like Cramer who will report it ASAP? I know where i would do it, and it isn’t the second string anchor.
From Cramer’s mouth to your disbelieving ears………….
go to the 6:00 minute mark and LISTEN!!!!
And your point is?
Jim Cramer is talking to a WIDE audience of everyone who wants to listen. He pushed the information out to everyone. The time frame did not change just because he learned of it from Tim Cook. The information was Tweeted out and broadcast as the market was opened. If it was NOT widely known, how was AAPL affected to rally as it did? If only Cramer knew about, nothing would have happened. Use that think on your shoulders for something other than a hat holder.
Come on, what did Tim say? Make it public. JIm… what did he say? Isn’t it time for all to know?
OOpps !! spoke to soon.
But this is kinda funny ” AS you know, we DON’T give mid-quarter updates……but, let me tell you we did stong in China July-August. So if CNBC put it on the air shortly after he said it (and we all know they would), big deal.
It’s such a head-scratcher that anyone could make such a blunder even a cup reporter would avoid. Mistaking a journalist for a single investor. Sheesh!
Hennessey just wanted to get “$63 billion” in a headline for clicks, er, I mean kicks.
It is too bad that CNBC only shares news with a very select and narrow group of viewers.
Timmy Timmy Timmy, don’t get sloppy now that everything is going so well otherwise!
Here is my advice to TC:
1. Ask Wozzie to join the Apple board – preferably as the chairman.
2. Ask Warren to become the new CFO
3. Ask Musk to become the next CTO and vice-CEO, reporting directly to you.
AAPL would double in value in 2-3 years if these 3 actions would be implemented
If I remember correctly, for weeks now unnamed commentators have forecast falling iPhone 6 sales in China. Apple’s stock went dutifully down. Then Eddie Cue made a few comments, one of which was that iPhone 6 sales in China were going up. Then Tim Cook issued his comment. So what we have here is a bunch of liars issuing false and misleading statements and two courageous members of the senior management issuing the truth. And now the pundits are predicting Tim Cook will get fined. How about the SEC should sue the snot out of the liars.