Steve Jobs Health Ping!
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Posted on 01/21/2009 12:06:51 PM PST by Swordmaker
"U.S. regulators are examining Apple Inc.’s disclosures about Chief Executive Officer Steve Jobs’s health problems to ensure investors weren’t misled, a person familiar with the matter said," David Scheer and Connie Guglielmo report for Bloomberg.
"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," Scheer and Guglielmo report.
"Investors have been pressing for information on Jobs’s health since June, when he appeared noticeably thinner at an Apple event. The company’s stock whipsawed this month after Jobs, who battled pancreatic cancer in 2004, said he would remain CEO while seeking a 'relatively simple' treatment for a nutritional ailment. Nine days later, Jobs said he would take a five-month medical leave after learning his health issues were 'more complex,'" Scheer and Guglielmo report.
"'The good news flipped by the bad news makes one wonder what Apple knew,' said James Cox, a law professor at Duke University in Durham, North Carolina. 'It’s not surprising for the SEC to come in and look afterward, given the pressure and publicity regarding their handling of a lot of cases,' such as criticism of the SEC’s response to Bernard Madoff’s alleged $50 billion Ponzi scheme," Scheer and Guglielmo report.
"To bring any case, the SEC would probably have to show the company tried to benefit by withholding information about an unambiguous diagnosis, said Peter Henning, a former federal prosecutor and SEC lawyer who now teaches at Wayne State University Law School in Detroit," Scheer and Guglielmo report. "'It would be difficult, and certainly a new area of the law,' Henning said. 'You would have to pin down exactly what they knew, and with a health issue -- unlike a merger or a decline in revenue -- it’s not subject to definitive answers.'"
"Corporate governance experts say shareholder interest in Jobs is unusually high because he is considered synonymous with Apple. He returned as CEO in 1997, turning the once-unprofitable maker of Macintosh computers into a successful consumer- electronics company with the iPod media player and iPhone. Jobs established himself as the face of Apple, serving as the main pitchman at every major product announcement over the past decade while yielding little time to other top executives," Scheer and Guglielmo report.
MacDailyNews Note: Steve Jobs has never appeared in an Apple commercial.
Scheer and Guglielmo continue, "Apple’s board may have met its obligations to shareholders by notifying investors that Jobs will be on leave, said Edward Smith, a corporate governance expert at Chadbourne & Parke in New York... The board isn’t obligated to provide specific details about the nature of Jobs’s illness, Smith said. 'It’s really an issue of the ability of the CEO during the period of his ill health to continue to advise and consult and manage the affairs of the company,' he said. 'Someone might be able to do that from a hospital bed for several weeks just as well as they may do it from the office.'"
Full article here.
MacDailyNews Take: Besides the point that there's nothing there — doctor's can and do change their minds and modify diagnosises over the course of minutes, to say nothing of days, weeks, months, or years — the current SEC couldn't investigate its way out of a wet paper bag. The SEC ought to be investigating "analysts" who attempt to manipulate prices rather than analyze companies and bring back the Uptick Rule immediately which would go a long way towards decreasing the negative manipulation of stocks based on rumors and intentionally misleading "analysis."
show trial...
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I thought Jobs was understating his illness all along, but I’m terribly pessimistic regarding Apple. We’ll see if this gets swept under the rug and made “okay” somehow, like the options backdating.
I thought they made a big mistake bring him back in the first place.
Seems I was right.
Sadly it is. Not because it made sense to pretend that he was the only talented one there, but because it made for good copy for Apple’s fans and the press.
Now it may be coming back to bite them big time.
Or the complete opposite of right. But definitely one of those two options.
Maybe one or the other...perhaps...(chuckle)
I guess the SEC has all the time in the world for Jobs but not Madoff’s record of red flags. Our system is so messed up.
You always choose the worst connotations to things where ever Apple is concerned, Troll. Facts actually are more important than your unsupported opinion.
The "options backdating" was anything but "swept under the rug." It was headline news for over a year. Several stockholder lawsuits were tossed out of court because the plaintiffs could not demonstrate that Jobs' compensation had in any way damaged them... and in fact, the judge in the cases commented that Jobs had enriched them far beyond the few pennies per share they were claiming might have been the impact of ALL of the backdated options for ALL of Apple's employees who received them.
Both an internal and an SEC investigation were made of Jobs involvement in the option backdating, which was and is perfectly legal so long as it is properly accounted, and Jobs was found to have not been involved. He had properly recused himself from board meetings where his compensation was discussed. They found he did suggest some dates for back dating options for other employees, but he was not instrumental in giving them, setting the dates, or voting on the compensation packages. and, the SEC found, he properly sought and relied on legal advice.
An Apple executive was fired over the backdating. Nancy Heinmen, Apple's Chief Legal Officer was fired, indicted by SEC, and eventually fined $3 million for some shenanigans she did to facilitate the options. She failed in her duty to properly advise the board of the legalities, but most importantly, she took it on herself to try and fix a small problem with the fact the board had voted on Jobs' options on August 29, but the paperwork was not finished until sometime in October, after the start of a new fiscal year. She found that company by-laws require such stock options to be granted in the fiscal year the board voted them... so instead of calling a new board meeting to revote the options, she created minutes for a board meeting in October for a meeting that never occurred, showing a duplicate vote, She then selected a date for the options that the stock price was the lowest of the new fiscal year but still FAR above the price on the date on which the options were first approved in August. Because of these shenanigans and the delay, Jobs actually LOST money from what he would have received had the options been granted when originally voted.
Heinman is appealing the decisions.
Fair enough except that no decision was ever made as to whether or not Apple was liable because plaintiffs could prove no damages. So the question as to their “ethical” lapses was never answered. Now they’re being investigated for possibly misleading the public on Steve-O’s illness to bolster the stock price? Who is running the company? The Clintons? Shenanigan after shenanigan from these people. If it walks like an ethical trainwreck and it talks like an ethical trainwreck...........
Kind of hard to prove damages since at the time, AAPL stock was rocketing into the stratosphere.
1. The only photos I've seen of Jobs look bad. He looks seriously ill in them.
2. People keep referring to his MacWorld appearance, which was something like a year ago. Has he not been seen at all? It seems like some paparazzi could make some big dollars getting shots of him getting into a car, leaving his house, or coming out of a doctor's office. If he really hasn't been seen by anyone except Apple personnel, his doctors and his family, that's telling.
3. The speculation about his health hurts the stock more than bad news would, IMHO. Sword, you keep up with all things Apple, is Jobs doing a Howard Hughes now?
Oh, one last thought. If a Jobs appearance would reassure people, I think he would have appeared in public. OTOH, if Jobs looks worse than he did at MacWorld, ...
Sure, I suppose its okay to cook books then as long as it doesn’t bankrupt the company. Just because their crookery made the stock rise doesn’t mean their hands are clean, it just means they have good lawyers.
Apple just reported that sales and profit exceeded expectations in the recent quarter...
Option backdating wasn't an issue for Jobs since he made no money. It was mainly an issue of the post-Enron accounting changes.
Here, no person is required to disclose health issues, and there are definitely laws against a company releasing health information about its employees and officers. Apple could have said absolutely nothing about his health, only releasing that he will be taking leave.
The only way this is SEC business is if Jobs purposely manipulated the release of health information in order to profit from stock price changes -- basically the use of insider information. I highly doubt you will find that happened.
I thought they made a big mistake bring him back in the first place.
Seems I was right.
What, was the Mac OS becoming more popular by the day when they brought Steve back? Did Apple have a ton of cash on hand back then, as they do now? Did AAPL have the iPod and the iPhone to complement the Mac back then? Is the market cap of AAPL far lower than that of Dell, as it was when Jobs came back?Yeah, I guess you were right back then.
</sarcasm>
It was answered by the SEC. The only unethical action was by one lawyers, and her and the CFO who didn't catch her actions have been taken care of. Apple basically handed them over to the SEC after its own internal investigation. You forget that backdating is legal. How it gets reported is the only issue, and the rule change caused a lot of confusion that hit a lot of companies.
The civil suits were standard ambulance chasing. One of the suits was by a guy named Martin Vogel, who had sued Apple a couple years before only to have it thrown out with prejudice (can't ever refile). He was just sitting around waiting for an excuse for another go at the Jackpot Justice Lottery, and the backdating gave him one.
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