Did Apple's Vague Disclosure of Jobs' Health Violate Securities Laws?

Lora Bentley

Six months ago, Steve Jobs took a medical leave of absence from his responsibilities at Apple because what company officials first called a "hormone imbalance" was more "complex" than they had thought. Some were irked by the vague nature of the company's statement, but Apple has a reputation for being tight-lipped, and it is the man's health we're talking about. Not exactly something you want to broadcast to the nation. Or is it?


More recently, the news broke that Jobs had received a liver transplant in a Tennessee hospital. The transplant team lead, Dr. James Eason, told the Los Angeles Times Jobs was "the sickest patient on the waiting list" when the donor became available. With this revelation, analysts and experts say Apple may have violated securities laws by not disclosing just how serious Jobs' condition was.


Securities laws don't specifically require companies to reveal the health problems of their executives, but they do require disclosure of material information -- or information that an investor would need to make an informed decision on the purchase or sale of stock. Some say that because Jobs "is Apple," his health is material information. Jeffrey C. Soza, a securities lawyer at Glaser, Weil, Fink, Jacobs, Howard & Shapiro in Los Angeles, told the LA Times, "If they tried to lessen the disclosure and make it misleading by omission, that's just as bad as telling something that flat isn't true."


Not surprisingly, Apple takes the position that Jobs' health is private information.

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