SEC Investigating Jobs Health Disclosures

July 9th, 2009 at 4:29 PM - News by Jeff Gamet

It's no secret that Apple CEO Steve Jobs took a six-month leave of absence for health reasons, but the Securities and Exchange Commission doesn't seem convinced the company was completely open when it discussed his health conditions. The U.S. government agency is apparently focusing on an investigation on Apple's change in stance over Mr. Jobs's condition from "simple" to "complex" in little over a week, according to Bloomberg.
On January 5 Apple claimed Mr. Jobs was suffering from a hormone imbalance, but on January 14 that changed to a six-month leave of absence. In a letter to employees, Mr. Jobs said "during the past week I have learned that my health-related issues are more complex than I originally thought."
In June, word surfaced that Mr. Jobs had in fact undergone a liver transplant and a few days later the Tennessee hospital that performed the operation confirmed the rumor.
Now the SEC wants to know whether or not Apple executives were aware that Mr. Jobs's health was worse than they revealed on January 5.
Securities law professor at the University of California, Robert Hillman, said "The issue here is: Did Apple or Jobs make misleading disclosures, tested by what they knew at the time? A disclosure could be misleading if it's a partial truth."
Peter Henning, a former federal prosecutor and SEC lawyer teaching at Wayne State University Law School, added "If it's an outright lie and he had a diagnosis before that first disclosure that, 'You're going to need a liver transplant,' then there's an issue. But I doubt the company out and out lied."
The investigation may be little more than a routine check to make sure Apple is operating on the up-and-up, or the SEC may have information indicating that Apple or Mr. Jobs intentionally misled investors with his health claims. Since the SEC and Apple are keeping tight-lipped, it's likely no one will know what spurred the scrutiny until the investigation is complete.