LOS ANGELES, June 25 (Xinhua) -- Analysts and legal experts are questioning whether Apple has run afoul of federal securities rules by keeping silent on its CEO Steve Jobs' health, a newspaper report said on Thursday.
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Apple Computer Inc. Chief Executive Officer Steve Jobs holds the new iPhone in this file photo taken in San Francisco, California on January 9, 2007. (Xinhua/Reuters Photo)
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Firms aren't required to disclose medical details
about executives, but they are required to divulge 'material' information
investors should know before buying or selling stock, the Los Angeles Times
said, quoting legal experts.
Apple had disclosed in early January that Jobs had a
"hormone imbalance" and would take a leave of absence, but never said he was so
sick that he needed a liver transplant.
A week later, Jobs admitted that his health issue was
"more complex" and would require a six-month leave.
"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," said Jeffrey C. Soza, a securities lawyer at Glaser, Weil, Fink, Jacobs,
Howard & Shapiro in Los Angeles.
The Tennessee doctor who led the transplant team said
this week that Jobs was "the sickest patient on the waiting list" at the time a
donor liver became available, according to the paper.
Dr. James D. Eason said that Apple's key man had
tested high --more likely to die from the condition -- on an index that rates
patients with end-stage liver disease.
The revelation of Jobs' illness riled critics because
it comes on the heels of long-standing displeasure with Apple's secretive
culture and what detractors say is its grudging disclosure of important issues,
the paper said.
The Cupertino, California company has maintained that
the initial statement was enough to satisfy disclosure rules imposed on publicly
traded companies.
But some analysts aren't so sure. Intentionally
downplaying the extent of such an illness could set Apple on the wrong side of
securities laws, Soza said.
Investor Warren E. Buffett agreed that Apple had been
less than forthright. "Certainly Steve Jobs is important to Apple," he said in a
CNBC-TV interview Wednesday. "Whether he is facing serious surgery or not is a
material fact."
The state of Jobs' health has long been a subject of
popular discussion, including his surgery for pancreatic cancer in 2004 and his
widely observed weight loss that preceded his leave of absence, the paper noted.
With that information in the public sphere, some
experts say Apple fulfilled its legal obligation by saying that Jobs was on
medical leave.
"His health is a matter of private information, which
the board may be in possession of but has no affirmative obligation to
disclose," said G. William Speer, a lawyer at Bryan Cave in Atlanta.
Jobs, who founded Apple in 1979, is widely considered
a visionary whose products have repeatedly allowed the company to reinvent
itself and stay ahead of the competition. His importance to the company fuels
the debates on how much information about his health is material for investors.
"Steve is Apple," said Danielle Levitas, an analyst
for industry research firm IDC. "The company was on the skids, and he came back
to revive them. No doubt, if he were gone, it would be a different company.
There aren't a whole lot of people out there like Steve Jobs."
Nor are there many companies whose fate seems so
closely tied to that of a single person, said Stephen Davis, a corporate
governance expert at Yale University's Millstein Center for Corporate Governance
and Performance.
"Whether he's able to come back, in what capacity and
when are all highly relevant to Apple's owners," Davis said. "We're in the
middle of huge financial crisis that's been caused in part by huge failures of
corporate governance. This is an age when you would hope corporations would get
that shareholders need some pretty high-quality disclosure."
The Securities and Exchange Commission declined to
comment on the situation.
