Is Apple Guilty of SEC Violations?

The SEC might be interested in Apple and the fact that Steve Jobs is ill. The company didn’t disclose the extent of his health problems at first and that might lead to SEC investigations. At least one person thinks so and others speculate.

Jobs was first said to have a hormonal imbalance. The company didn’t give much information about Jobs health until January, and initially said that his thin, unhealthy look was due to hormonal imbalances. For months the company had declared that the health of its top executive was its business. At least one person believes there should be an investigation about all of these happenings at Apple to determine whether or not SEC rules were violated. Steve Tobak takes this on in a business article where he reviews some of the SEC’s regulations where it is said that they have to disclose “material information” to all investors at the same time. This was to limit insider trading. If Apple violated these regulations, it might be said that it was guilty of a crime. Tobak continues that disclosing material information means to do so simultaneously to the same investment community at once through email, phone calls, and business website. He goes on to say, however, there may be ambiguity and subjective argument to what is called materiality and timing, which are words used in the SEC regulations. Still Tobak believes that Apple CEO’s Steve Jobs is a central figure in Apple’s functioning and therefore his health would be considered material since it would have a substantial effect on the health of Apple. The question therefore becomes the timing and how long a company can take before disclosing something that is material. Further Tobak argues that whether or not Apple violated securities regulations would be determined by finding out whether or not the news had been leaked first and secondly whether Apple had intentionally misled investors when the company said that Job’s leave of absence from the company had something to do with hormone imbalance. Trobak believes the SEC should investigate all of this but doesn’t believe Apple misled investors. Still he thinks that company executives faced with a similar situation should disclose their health quickly because the longer the information is held the more it looks like a violation of the SEC rules has occurred. It is said that now the SEC is interested.