SEC review of Apple disclosure now more complex?
The SEC wants to know what Apple knew and when about Steve Jobs' health.
(Credit: James Martin/CNET)The SEC continues to be very interested in how the health of Apple CEO Steve Jobs went from "hormonal imbalance" to a six-month medical leave in a matter of nine days back in January.
The SEC was said to be reviewing the way Apple handled the disclosures surrounding the health of Jobs in late January, but a new Bloomberg report Wednesday says the federal inquiry is ongoing, citing "people familiar with the matter."
The issue is whether the Apple board knew the seriousness of Jobs' health problems yet made misleading statements to stockholders and the public. On January 5, to explain his absence from MacWorld, Jobs said he was suffering from a "hormone imbalance." Nine days later, Jobs wrote a public letter to say he was taking a medical leave of absence for six months because he had learned in the past week his health issues were "more complex than (he) originally thought."
We know now that Jobs had a liver transplant in April, and has since returned to work on a part-time basis. His doctors have said his health prognosis is good. But during that time, did any board members--two of whom were getting regular updates on Jobs' health status from his doctors--make inaccurate or misleading statements to investors?
There's been disagreement among experts in corporate governance on the proper way to handle the private health issues of the public faces of major companies. Berkshire Hathaway CEO Warren Buffett said in June that as the head of his company, his health is a "material fact" that investors need to know to make informed decisions.
Apple has disagreed, and hasn't even acknowledged that Jobs' liver transplant took place. The hospital in Tennessee where he had the operation was the one who officially confirmed it happened. But nobody is saying exactly why he needed it. In fact, Apple has refused almost all opportunities to discuss Jobs' condition ever since his gaunt appearance at the Worldwide Developers Conference in June 2008 aroused speculation that the pancreatic cancer he battled between 2003 and 2004 had returned.
There is no rule or regulation that says public companies must disclose the health problems of its chief executives. But there is the expectation that if a company does, it should be truthful. The SEC has not accused Apple of lying or misleading the public, but it is trying to determine just how much the company or its board members knew, and when.
Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur. E-mail Erica. 
-William Shakespeare
You can continue to hide your head in the sand if you want, but the rest of the world... and the SEC wants answers.
At the end of the day, companies are run by people. Those people have an impact. Becasue they have an impact investors actually need to kinow when they won't be "doing their job". An investor may not need to know about the Janiter, but they do need to know about Executive Managment. As the company owners it's mateiral.
It's not about knowing everthing. IT's about knowing if a person can do the job. I don't care that he had a liver transplant. I still don't care. I do care that he was gone for 6 months and potentially longer, and had a certain potential of not coming back.
Oh and while you buy stock in a company, you would be a moron if you didn't pay attention to who's running the show. They are the ones who make the decisions that either make a company do well or drive it into the ground.
That line alone casts enough doubt into the integrity and professionalism of the company to cause investors to take heed and carefully think about what they are investing in.
This could be quite damaging for Apple's reputation and their financial situation when it comes to the SEC. Don't tick off the SEC. They don't like that.
Apple has weathered far worse than this inquiry so I am not going to lose any sleep over it.
Just don't forget to sell your stock the week before Steve Jobs leaves Apple lest you learn how much it does mean in this case.
If Steve Jobs is irrelevant to the company he works for, then why does the company employ him as their leader?
Apple seems to think having him as the CEO is fairly important- it would be a wise investor to know this as well. A responsible investor would want to know all the facts instead of blindly tossing money in a pile hoping it will generate more without knowledge of how the process works.
That would be the part where they need to disclose material facts. You know those things that Enron didn't disclose and thereby cost their shareholders a lot of money?
As a smart investor yourself you should know what a material fact is. Even if it's with 20/20 hindsight since you wern't told up front.
Apple may survive the lost of Job's. However His importants to Apple and perhaps specificly to the Share value can't be understated. That's where the material fact comes on. Warren Buffet "gets it" Apple and perhaps Jobs don't.
If the SEC were to try to compel Jobs or Apple to release some or all of that information or punish them for not having done it, the SEC could find themselves in quite a bit of trouble.
Then Apple shouldn't be giving any info at all.
Give either truthful information or none at all.
Lying to shareholders in any way is a crime.
Monkeyfun, I don't think you know what that means. LMAO stands for Laughing My Anatomical reference Off. It is to be used when someone says something funny.
Monkeyfun, that is something worth laughing your anatomy off. Humor, I know it's hard.
: )
"Windows is.... A 32-bit extension to a 16-bit graphical interface, sitting on an 8-bit operating system, originally written for a 4-bit processor by a 2-bit company without ONE BIT of common sense."
HAHAHAHAHAHAHAHA! You are anything but unbiased.
Well if your a Apple user you should be used to this. lmao...
http://www.startribune.com/business/48798452.html
"Nothing is required to be disclosed unless the health issue affects his ability to steward the company appropriately,"
http://www.google.com/hostednews/ap/article/ALeqM5gT2mWvUsz13Ck4nYvSG05Whb-OtgD9902U680
"She said the SEC rules lack specific guidelines regarding executive health disclosures, which means corporate directors have discretion over what kind of information they decide to tell the public."
"From a legal standpoint, Apple doesn't have to disclose a thing."
Ok. So is there anything other than a liver transplant that would affect his ability to steward the company?
- by m.meister July 8, 2009 7:47 PM PDT
- While the SEC may be investigating this, it does not mean anything was inappropriate.
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- by Seaspray0 July 10, 2009 12:16 PM PDT
- The timing was too perfect. His medical leave is exactly the time he needed to recover from a liver transplant. I beleive the liver transplant was in the works prior to his announced 6 mo medical leave.
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(39 Comments)It may well be that the initial diagnosis was "hormone imbalance" and a few weeks later, it was decided that Jobs should take some time off to help with that and only after he was on sick leave did the doctors realize the situation required more drastic option.
In that scenario, everything that Apple presented was accurate at the time it was presented. While we can look at it with hindsight and think they knew more, the facts may be that did gave the best info they had available at the time.