Though the Securities and Exchange Commission rules governing selective disclosure and insider trading contain no provisions relating specifically to the health of executives, publicly traded companies must nonetheless manage the potential implications of their key executives’ health on perceptions of the company’s future success as well as their propriety in disclosing information material to investors. This can be a difficult task, as an employer disclosing particulars about an employee’s health seems to run contrary to the special privacy protections given health information in the U.S., yet such information can undeniably affect investors’ decisions. Recently, the Securities and Exchange Commission launched a probe to evaluate
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The company’s stock value subsequently dropped 2.4%. In 2008, speculation about Jobs’ health again gathered momentum due to his increasingly thin appearance. Investor unease came to a head in October, when an erroneous item stating that Jobs had suffered a heart attack was posted on CNN.com’s iReport website. By the time Apple was able to rebut the report publicly its stock value had dropped 10%, demonstrating how closely investors associate Jobs’ leadership with Apple’s success. A December announcement that Jobs would not deliver his customary keynote presentation the following January at the annual Macworld Expo only served to exacerbate investor concerns.
On January 5th of 2009, coincidental with the start of the popular Macworld Expo event, Apple released a communication from Jobs stating that tests had confirmed what was causing his weight loss and that the remedy was “relatively simple and straightforward.” Nine days later, on January 14th, the company released another statement from Jobs, which explained that the CEO had decided to take a five month medical leave because he had recently learned that his “health-related issues are more complex than [he] originally thought.” Following the latter statement, Apple’s stock value dipped 7% in after-hours trading.
Issues and Concerns
The recent SEC investigation of Apple was initiated to determine if Apple insiders selectively informed investors of Jobs’ intentions or knowingly mislead investors with the January