Apple could face lawsuits over Jobs' health

Apple could be sued for misleading the investors about Steve Jobs' medical status and for being slow to form a succession plan after his 2004 cancer treatment. Rick Hanna, an analyst, figures that Apple was trading 10% to 15% higher because of Jobs' leadership and skills, and today's (wednesday 14th, Jan 2009) 10% drop in stocks after the company's announcement has erased that benefit.

Just 9 days after Jobs admitted publically that his weight loss in recent months was caused by harmone imbalance, the news about him going on a medical leave is in. This is making worried investors think that Jobs could be once again suffering from cancer that would require a 6 month leave of absence.

Apple released the text of an email Jobs sent to the company's employees today, in which Jobs has handed over the control to Chief Operating Officer Tim Cook. Cook ran Apple for two months while Jobs recuperated from the pancreas cancer surgery. Later Cook became responsible for Apple's world-wide sales and its Macintosh computer division and he was appointed Chief Operating Officer of Apple in 2005. Even though Cook doesn't possess the corporate showmanship of Mr. Jobs, he is respected as a low-key individual who helped Apple from sinking during the mid-90s.

Securities lawsuits can be filed from companies' false statements about material aspects of their businesses and no securities rules and legal precedents require CEO's health status to be disclosed. But Jobs' status as CEO is critical for investors to decide about investing in Apple and the law is not clear about whether the company has to disclose personal medical information.

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What a load of ****.

Come on people.
Do you (inverstor) want to kill some topman to win money????? It seems that these people are happy that he got sick. Just to sue him to get some money. Are you guys asking that Steve Jobs has cancer??
And what is it that Steve Jobs is Apple?? Our nonsence.

Steve Jobs didn't make the iPod
Steve Jobs did'n't make the iPhone..
etc etc etc....

It's a team working on a product. Yes, you have to have a topman to supervise and make bussiness plans etc...,
but by himself steve jobs could never have make such great product. All the decision for apple Steve jobs isn't making. I don't think that the investor self will leave all their money into 1 person hands..

But what can I say, where is the moral of these kind people gone?

LTD - when Jobs dies... are you going to get the apple i-Cheese Grater and scrape off Job's face off your arm?

Something I dont get:
apples motto: Think Different
How come every apple fanboy is the same type of d!ckhead then?

LTD is just defending a company he likes. If you disagree with what he says, refute his theories instead of letting other people do it.

And I don't like Apple fanboys either, but attacking somebody just to be a douche instead of constructively saying...well, anything at all, makes you look an even bigger douche.

Actually, it could be quite simple to argue that Apple/Job deliberately delayed revealing the real extent of his illness until after the new product releases at MacWorld. This is probably not illegal in the strictest sense (or at least wasn't to the overall detriment of shareholders), unless it was shown that key Apple executives sold large amounts of stock very recently. And I've seen nothing to indicate any sort of insider trading is tied to this complaint.

LTD said,
If investors are fool enough not to recognize the current value of all this, not to mention its insane potential, then they deserve to be parted with their money. And the sooner the better.


Surely you recognise the logic in the way investors are acting LTD? You play to the fanciful idea that Apple still has the same ‘value’ that it once did. You must recognise a ‘Job-less’ Apple is an Apple devalued until such time that his team proves their worth.

Jobs was portrayed as a messiah when he returned to Apple and he was, considering the way he has turned Apple around. A portrayal encouraged (whether intentional or not) by the fact that any other member of the team was closeted away; making it seem as if they were merely necessary to follow the normalities of corporation management rather than necessary because they added value to the company. Apple should have put them in the spotlight, introduced them to the media and thus investors, thereby proving their supposed worth.

Messiah he may be, but immortal he is not. Apple could have prepared for his departure, doing so would have mitigated the effects we̢۪re seeing now. Investors are justified in the way they are acting (not that they need to justify themselves :p).

Investors' perceptions are understandable, but that still doesn't translate into law. If investors can't maintain a healthy perspective, that's entirely their fault.

And let's not start assuming that all Apple investors are up in arms about this. There isn't even word of a case about this. For now it's just speculation.

You really dont get it, do you, LTD?

Despite the fanboy rah,rah PSA you just gave. Apple is in serious trouble as most of the consumer electronics world is getting more and more of the spotlight with better products and better designs than Apple's stale, mid-2000s offerings, and rehashed product "refreshes" which amount to little more than making it more restrictive, slightly thinner, and more expensive.

You see the buzz with the Pre, Windows 7, netbooks, and Android? Welcome to 2009.

Apple relies on Jobs to keep them on message. As you can tell from Macworld, when he aint on it, the whole thing goes flat.

ROFL!!!

Finally the competition shows some competence. It's about time. it also shows how the rest of the industry is still taking cues from Apple. And why shouldn't they.

LTD said,
ROFL!!!

Finally the competition shows some competence. It's about time. it also shows how the rest of the industry is still taking cues from Apple. And why shouldn't they.


It does work both ways. Apple took a cue from the PC industry and switched to a main-stream CPU and architecture and look what happened... sales went up. Kinda strange, dontcha think?

Are some of you serious?

For years Steve Jobs has been portrayed by Apple fanboys, Fanboy bloggers, and in the mainstream media as the first, last and everything when it came to apple.

iGod
The Steve
Steve-O
Jobsie
Dear Leader

Funny how we didnt hear of any of the "stellar" team at Apple that we are now supposed to believe are the real brains of the company, when for years we were forced fed the notion that Jobs was the ENTIRE operation down to the placement of the damn icons on the desktop. The whole "genius" behind Apple.

So now that the guy is off the stage, all of a sudden the great iSpin is that he didn't really matter all that much? Guess what, the investors, who bought on the "iGod Jobs" spin from the Apple buzz machine, are bailing when the iGod goes down, and some are PO'd that they felt they might have been misled.

They are totally justified. Personally I think they are bigger empty headed morons than the average 21-year-old fanboy that's now b*tching of how they are kicking "... the man while he is down. Great." as if the world should rally around Jobs by buying Apple gadgets and purchasing stocks based on the faith that the team behind jobs, that up until now was not even worth mentioning, have always been the stars. Really?

You can already see them try to spin that story on multiple websites. How much you wanna bet that the average Apple fan had no idea who any of these people were before yesterday. Now they are all better than Jobs, so rally round the iFlag, boys!

The market doesn't care how much you love your iGadget or how many Apple stickers you have on your car. They bought on Hype of one man and they will bail/sell/sue on his collapse. So dont wag your finger in their face, when its partially the fault of the fans that made this situation happen

You're talking about investor perceptions, which not only vary, but are also separate from what is allowable under the law. You can use all those cute "iThis" and "iThat" references because you now have occasion to do so, but they don't carry nearly as much substance legally as you might like.

What really matters is what these investors are able to do legally. At this point, if this non-existent case were to actually materialize, it would be completely new territory, and as it stands right now the law is on Apple's side.

You're letting perceptions get the better of you, based on what the fan base might or might not have thought of Jobs. And you'll need a lot more than perceptions to make an actual case.

Fair disclosure is fair disclosure. Exactly how much do you want a company to disclose in order to minimize investor risk??

At this point, the investors are legally deemed as having invested in the company - the entity under the ticker AAPL, not Steve Jobs. His liability in this matter can only go so far, regardless of what imaginary importance they or the media or the fanbase might have attached to him. That's the kind of risk that investors have to bear.

I'm sure you missed the part where I said:

"Personally I think they are bigger empty headed morons..."

However, when you make the one guy the ENTIRE face, and supposed genius of the company, guess what? Yeah, people are going to demand a bit more info on this guys ability to keep up that image regardless if it's reality or perception. Because like it or not that companies image was built around HIM. When he doesn't preform according to that script, for whatever reason, then the whole company suffers.

That's what happens when you dont acknowledge the whole team, as Apple should have been doing for years, but instead put on this one-man show because it made the fans heats flutter and the tech media go wild.

Now it coming to bite them in the arse.

Ozood said,
I'm sure you missed the part where I said:
However, when you make the one guy the ENTIRE face,

That's the thing though. Jobs is pretty much the ENTIRE face of Apple. Whenever you see Jobs, you see Apple. Whenever you see Apple, you see Jobs.

You forget that Apple was in a downward spiral not too long ago, and bringing Jobs back into the fold is what got Apple to where they are today. He pushes hard to achieve excellence. You may not think Apple is great, I know I don't, but Jobs has to be doing something right for Apple to be where they are at.

Say what you will about Jobs, but he is Apple.

On the health issue...Good luck to him. Best wishes.

Guys This is the same as bill gates leaving. Apple can survive without Steve Jobs. How much do you want to bet steve saw how microsoft is doing without bill and decided he needed a break also?

This is not any diff then bill gates leaving microsoft.

I agree everyone who had stock should have bailed ship when Jobs released his stupid non informative letter. The fact of the mater is a CEO's is directly related to how the stock will do in the stock market. If say the CEO knew he was going to DIE and the company didn't disclose that information, because they knew exactly what that would do to the companies stock. Then when he does die people loose their ass in the market because when he dies or leaves for an extended period of time the stock obviously tanks. Had the stock holders been given information they would not still be holding onto the stock. So yes. Sue them. Sue them all to hell.

I like Apple, and I think this is stupid. You invest in Apple because APPLE is doing well, not because of the CEO.

And +LTD, you're THE real Apple Fanboy....

TruckWEB said,
I like Apple, and I think this is stupid. You invest in Apple because APPLE is doing well, not because of the CEO.

And +LTD, you're THE real Apple Fanboy....

Hey, give me a reason to like your product and then give me a reason to stick with you, and you've got me. ;)

I have more respect for Apple and what they are about and what they do, than for any other tech company. For instance, the OS X design team will argue over a single pixel - their attention to detail is insane. That's the kind of commitment and creativity that sets them apart. How can I possibly ignore that when it's so rare in the industry. And as a result, it's obvious why it's so easy for Apple to inspire such enthusiasm in its users and such awe from the industry as a whole.

This will be thrown out of court due to investor stupidity.

Look, if the CEO is capable of making the decisions and carrying out his job that is all you need to know as an investor. And you don't need to know any specifics. It's "YES the CEO can do his job completely and competently" or "NO he cannot". That's it. You don't need to know if he has a medical condition and if so, what it is. If the CEO chooses to disclose that, fine. But he has a right to privacy so if an investor thinks they can sue a company because the CEO didn't provide medical records they should be stripped of their shares and given a permanent STUPID tattoo on their forehead.

Any COE could get hit by a bus tomorrow. Are you going to sue the company for not sending out a warning to you about that?

You are investing in a company, not solely the CEO. If you want shares in "Steve Jobs" instead of 'Apple' go join a fan club or send Stevie a cheque.

roadwarrior said,
That has got to be the closest thing to a Pro-Apple comment I've ever seen you post!


Again, I find myself agreeing with C_Guy. I hope none of those flying pigs hits my office window. ;)

Seriously, though, all you need to do is exercise some common sense in these matters, and I'll usually yield to that.

Just 9 days after Jobs admitted publically that his weight loss in recent months was caused by harmone imbalance
Should that not be hormone

Their argument is that Apple's health as a company is linked to Steve Jobs' health. Obviously those who feel that way have very little faith in the viability of a post-Jobs Apple.

If that's the case, then why wait? Jobs is going to die eventually, current health issues or not. Why not give up on Apple now, and not delay the inevitable?

Those who have no faith in a post-Jobs Apple also have no faith in Apple's current team, which is second to none in Silicon Valley.

Bad move.

I find that incredibly ridiculous. Apple has thousands of employees and to act like Steve jobs is the make or break is beyond ludicrous.

Steven77 said,
I find that incredibly ridiculous. Apple has thousands of employees and to act like Steve jobs is the make or break is beyond ludicrous.

Right. Jobs has a lot of star power. We can't let that obfuscate the rest of the elements that make up Apple.

This system is so wrong that a person is struggling with his health and the market is only worried about the shares going up or down. It is so sad.

Eduardo said,
This system is so wrong that a person is struggling with his health and the market is only worried about the shares going up or down. It is so sad.


What's so sad about it????? Steve Jobs is the ultimate capitalist - pushing Apple products any moment he can - even on platforms about social events. He doesn's even give money for cancer research as a cancer survivor. My point is - he is all about making money and you can't expect the market to worry otherwise. They are driven to believe in this unbreakable, synominous link.

Mista T said,
What's so sad about it????? Steve Jobs is the ultimate capitalist - pushing Apple products any moment he can - even on platforms about social events. He doesn's even give money for cancer research as a cancer survivor. My point is - he is all about making money and you can't expect the market to worry otherwise. They are driven to believe in this unbreakable, synominous link.

Most people in business push their products whenever they can. True. And most people in business, at the end of the day, are all about making money. It doesn't make sickness or disease befalling them any less unfortunate or even tragic.

And very true, the market doesn't usually concern itself with that kind of sentimentality.

Not to worry, it'll be extremely difficult to pull off legally. And when Apple does their product rollouts this year everyone will be all smiles again, with a healthy Tim Cook at the helm and a very competent team (best in the industry) under Schiller. This will give Jobs the breathing room he requires to just take it easy and focus on getting better.

You can, and should, blame the media for most of this mess. It's not their role, however, to exercise restraint and show class. The media did its job of speculating wildly and sensationalizing the issue. In the absence of facts they have nothing else they can do.

The situation could have been handled better by Apple, but this little nugget from an analyst about possible lawsuits really isn't anything to worry over.

LTD said,
Not to worry, it'll be extremely difficult to pull off legally. And when Apple does their product rollouts this year everyone will be all smiles again, with a healthy Tim Cook at the helm and a very competent team (best in the industry) under Schiller. This will give Jobs the breathing room he requires to just take it easy and focus on getting better.

You can, and should, blame the media for most of this mess. It's not their role, however, to exercise restraint and show class. The media did its job of speculating wildly and sensationalizing the issue. In the absence of facts they have nothing else they can do.

The situation could have been handled better by Apple, but this little nugget from an analyst about possible lawsuits really isn't anything to worry over.


What kind of qualifications do you have to make the comments you are making LTD apart from being an Apple Fanboy?? Are you a lawyer like kirkburn said above or an analyst?

Consider a few of the legal hurdles required to overcome in order to bring a viable case. There is no precedent for this, and for there to be one (newly set by this case, which doesn't even exist) we need to view Steve Jobs vis-a-vis his relationship to Apple as a special case. Not so easy to do. Federal law doesn't require corporate leaders to tell the world they're sick - whether it's cancer or the common cold. Jobs would not necessarily have any liability of he knows he's very sick and says nothing. Anti-fraud rules prohibit the telling of material lies, but they don't say to tell the whole truth on a regular basis, and at certain (quarterly) moments you have to add certain kinds of disclosure.

Steve Jobs, however, could be different, if we regard his health and his status are somehow material to the stock price. If that argument is made and proven, then the next obstacle is to prove that there was a material misstatement resulting in a significant market loss. Then, and really only then, does plaintiff's counsel have a case.

So it would be a difficult case to prove because it does venture into uncharted territory. At this point there is no such case against Jobs, only analysts telling us what is obvious, that a lawsuit is possible - just as lawsuits are possible for anything, regardless of their chances of success.

mmck said,
If they can prove they witheld information about a more severe state of his health it wont be difficult at all.

Yes, that might be actionable. But then you need to clearly connect Steve Jobs as somehow being material to the stock price, beyond any doubt. And there are other factors that affect clearly affect stock price, such as product rollout expectations being met or not met (i.e., the recent MacWorld), earnings reports, etc.

LTD said,
Consider a few of the legal hurdles required to overcome in order to bring a viable case. There is no precedent for this, and for there to be one (newly set by this case, which doesn't even exist) we need to view Steve Jobs vis-a-vis his relationship to Apple as a special case. Not so easy to do. Federal law doesn't require corporate leaders to tell the world they're sick - whether it's cancer or the common cold. Jobs would not necessarily have any liability of he knows he's very sick and says nothing. Anti-fraud rules prohibit the telling of material lies, but they don't say to tell the whole truth on a regular basis, and at certain (quarterly) moments you have to add certain kinds of disclosure.

Steve Jobs, however, could be different, if we regard his health and his status are somehow material to the stock price. If that argument is made and proven, then the next obstacle is to prove that there was a material misstatement resulting in a significant market loss. Then, and really only then, does plaintiff's counsel have a case.

So it would be a difficult case to prove because it does venture into uncharted territory. At this point there is no such case against Jobs, only analysts telling us what is obvious, that a lawsuit is possible - just as lawsuits are possible for anything, regardless of their chances of success.

Amen tell it brotha!

Aren't stocks supposed to represent the health of the company and not it's CEO? The man is special I agree but a lot of creative people stand behind what Apple is today.

I read this as: They are arguing the health of Apple as a company is linked to Jobs' health and continued work as CEO.
the 10% drop shows how much belief there is in this idea.

It's the CEO's job to protect the company and investors. If we public announced that they didn't know what was wrong with him then the company would be far worse off, speculation alone would cripple the stocks. He did the right thing keeping it private. Even if he didn't they were unsure of what was the problem, you don't off full disclosure on matters of uncertainty. Suing the man/company because he got sick and had to take time off is ridiculous, but leave it to americans to sue anybody and everybody.

Xero
but leave it to americans to sue anybody and everybody.

Oh yeah I know! The EU NEVER sues anyone. Suing is strictly American. Yep.

You left out, "Leave it to Americans to develop my OS and my CPU so I can use a computer." What does your country produce? Chances are, not as much (if anything at all) as sue-happy America.

RAID 0 said,
Xero
but leave it to americans to sue anybody and everybody.

Oh yeah I know! The EU NEVER sues anyone. Suing is strictly American. Yep.

You left out, "Leave it to Americans to develop my OS and my CPU so I can use a computer." What does your country produce? Chances are, not as much (if anything at all) as sue-happy America.


except alot of your "american" stuff is made in japan, taiwan and mexico. so keep on your american the great bull to counteract someone elses ignorance of other countries. great idea.