Corporations must make "material disclosures" to shareholders, information that, if known, would induce a shareholder to sell or buy shares. If you don't make such disclosures, or if you omit material information, you're probably in hot water with the Securities and Exchange Commission.
With that legal framework, we turn to the question of Steve Jobs' liver transplant. While some would argue that Jobs' health is a personal matter, when it's such that he has to leave the company for five months, it's clearly a matter of shareholder concern.
Apple did announce on Jan. 14 he was taking medical leave, although it didn't explain just how serious his condition was - or what condition he had. Of greater concern to the SEC, Bloomberg reports is Jobs' statement just nine days before he was suffering from a "hormone imbalance."
Was that a lie? Or just a half-truth? Or was the board truly ignorant of the situation on January 5? The SEC wants to know.
The issue here is: Did Apple or Jobs make misleading disclosures, tested by what they knew at the time?” said Robert Hillman, a securities law professor at the University of California, Davis. “A disclosure could be misleading if it’s a partial truth.”
Take a look at what Steve said on Jan. 5.
Fortunately, after further testing, my doctors think they have found the cause—a hormone imbalance that has been “robbing” me of the proteins my body needs to be healthy. Sophisticated blood tests have confirmed this diagnosis.
The remedy for this nutritional problem is relatively simple and straightforward, and I’ve already begun treatment. But, just like I didn’t lose this much weight and body mass in a week or a month, my doctors expect it will take me until late this Spring to regain it. I will continue as Apple’s CEO during my recovery.
He was announcing a five-month absence. During that time he had a liver transplant. The only way this statement isn't a bald-faced lie, or at least seriously omits relevant information, is that if between Jan. 5 and 14, his doctors take one more look at the numbers, slap their heads and go:
"Woah, dude! Actually, you need more than hormone therapy, you need a new liver! Good thing you already announced that time off."
You believe that?