Apple Being Investigated By SEC Over Way Jobs' Health Handled? It Should Be
This story was written by Staci D. Kramer.
Apple's disclosuresand non-disclosuresabout the health of CEO Steve Jobs are being investigated by the SEC, Bloomberg reports, citing "a person familiar with the matter." It's unclear whether the "person" is on the federal or corporate side, but it sounds like government: "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." Jobs announced last week that he was taking a medical leave of absence, but his health has been in the spotlight since June, along with denials for most of that time that anything was wrong.
Corporate governance experts and others have expressed serious concerns about the wording and timing of statements from Apple (NSDQ: AAPL) and Jobs about his health, the lack of disclosure, and the way it may have affected investors.The stock, which rises and falls with news about Jobs, rose when Jobs' said his health issues wouldn't keep him from work and dropped nine days later when he admitted he needed a medical leave. Adding to the mix, this isn't the first time issues have been raised; the company kept Jobs' pancreatic cancer secret in 2004. At issue: when do companies owe investors information about the health of a key employee and how much should be divulged? Apple is a particularly difficult case given Jobs' iconic status both as a promoter of the company's products and as the engineer of its revival and continued growth. If the SEC is serious about transparency and disclosure to investors, an investigation should be underway.
Back story: In back-to-back announcements this month, Apple and Jobs addressed the health concerns the company brushed off when it said in December he would not deliver his annual MacWorld keynote. On the eve of MacWorld, Jobs said that he had a "hormone imbalance" that was causing him some problems but said the treatment was simple. He also said his search for a medical answer to his noticeable weight loss started "a few weeks ago" when "I decided that getting to the root cause of this and reversing it needed to become my #1 priority." This came roughly six months after he appeared so thin at a public event that rumors started instantly about his health. At the time, the Apple board expressed support and promised: "if there ever comes a day when Steve wants to retire or for other reasons cannot continue to fulfill his duties as Apple's CEO, you will know it." Nine days later, trading halted in Apple shares after hours and Jobs said, via a note to employees issued as a media advisory, that his problem was more complex and he would be taking a medical leave of absence until late spring. But he also stressed: "As CEO, I plan to remain involved in major strategic decisions while I am out."
Fresh reports: That didn't stop the reports and rumors (sometimes, it's difficult to see the difference) about Jobs' medical condition, including Bloomberg's report that he is considering a liver transplant.
By Staci D. Kramer