Lawsuits against Apple likely in light of Jobs' latest disclosure
While many are wishing Steve Jobs a speedy recovery, members of the legal and investment communities believe his disclosure Wednesday will inevitably open Apple to lawsuits from shareholders unhappy with the recent secrecy over his uncertain health.
Investors may choose to litigate if they feel misled or cheated by Apple's tight-lipped policy on discussing Jobs' health issues, a matter which has undoubtedly played a major role in driving the company's share price to less than half of its 52-week high of $192.24. However, such lawsuits would be new territory for a judge to navigate, as the law is unclear on what personal medical information a company must (or must not) disclose about members of its top brass.
Background
This public debate has been ongoing for quite some time, ever since it was revealed that Jobs hid his battle with cancer for nine full months beforeÂ*sharing such informing with shareholders.Â* He recovered rapidly from the near-death experience andÂ*returned to work full-time only a few months later.Â* Since then, he's faced a balancing act between competing forces when it comes to his health.Â* On one hand, he's entitled to his privacy just like anyone else.Â* On the other, he's seen as an invaluable and irreplaceable asset to Apple -- one who carries a tremendous influence on the price of the company's shares, which are owned by the general public.
After appearing overly gaunt at this year's annual Apple developers conference, stories about Jobs' health and the resulting photographs threatened to overshadow the actual product announcements he made during the event.Â*Many believe the attention was justified. A report from last June suggested Jobs may be worth more to Apple than any other chief executive in the world, adding that the company's market cap could enter into a $20 billion free-fall should he be abruptly forced to abandon his leadership position.
Steve Jobs at Apple's 2008 developers conference | Copyright Reuters..
Possible Litigation
Thus, Wednesday's announcement that the Apple co-founder will step aside at least through June immediately sparked a 7 percent drop in the company's share price during after-hours trading, losing $6.03 to $79.30.
In a report titled "Apple could face lawsuits over Jobs' health," ReutersÂ*explores the possible legal response from unhappy investors who feel they were misled and suffered financially from Apple's tight-lipped approach to Jobs' well-being.
Former U.S. Securities and Exchange Commissioner Joseph Grundfest said such cases would be the first of their kind and very difficult to prove.
"I never underestimate the cleverness of plaintiffs attorneys but I personally am aware of no theory that would support a filing of a case," he said.
Plaintiffs attorney Steve Williams, who works for Cotchett Pitre & McCarthy, compared the way Apple may have "minimized" Jobs' illness to the way pharmaceutical companies are sometimes deliberately slow to disclose how their drugs are faring in government trials, a practice that does give rise to frequent lawsuits from investors.
"If [Apple] misled me by giving me the impression that (Jobs) was going to continue to lead the company, that could be an actionable statement," Williams said.
A different attorney threw cold water on that sentiment, saying there would have to be a "smoking gun" to counter Apple's contention that Jobs' medical situation was "constantly evolving."
"In the absence of some memo from a doctor that contradicts what he is saying, I would think it would be problematic for a plaintiff (to sue for disclosure lapses),"Â*said the attorney, who requested anonymity because his firm is litigating with Apple.Â* "It is not the same as looking at a piece of financial information at the end of the month."
Jobs touches on his near-death experience during a 2005 Stanford commencement address.
More Reaction
Meanwhile, the Industry Standard hasÂ*compiledÂ*a roundup of reaction from "the tech punditsphere," as the story puts it.
"Somewhere, right now, a plaintiff lawyer is preparing to file a lawsuit against Apple on behalf of shareholders who will claim they were deceived," said John Carney ofÂ*Clusterstock.Â* "Unless Jobs' health suddenly deteriorated in the last week, Jobs misled investors when he addressed the issue.Â* Issuing misleading statements to shareholders will certainly open Apple to potential shareholder liability."
"I think the market and most Apple observers are expecting it to be worse than they're telling us," said Barron's West Coast Editor Mark Veverka.Â* "Two weeks ago....they said nothing was wrong.Â* Now he's taking a leave of absence.Â* It creates more fear about the stock."
In a post at his website entitledÂ*"You are an idiot if you sell your Apple stock tomorrow", Robert Scoble wrote, "Apple has the best team, the best distribution, the best supply chain, the best management in the business... Apple is more than just Steve Jobs... Apple is fine and we'll all buy the next big thing that they do no matter who brings it to us."
Briefly: Not cancer
For its part, the New York TimesÂ*isÂ*citing two sources close to Jobs who say the present malady is not cancer, but "a condition that was preventing his body from absorbing food.Â* Doctors have also advised him to cut down on stress, which may be making the problem worse."
Investors may choose to litigate if they feel misled or cheated by Apple's tight-lipped policy on discussing Jobs' health issues, a matter which has undoubtedly played a major role in driving the company's share price to less than half of its 52-week high of $192.24. However, such lawsuits would be new territory for a judge to navigate, as the law is unclear on what personal medical information a company must (or must not) disclose about members of its top brass.
Background
This public debate has been ongoing for quite some time, ever since it was revealed that Jobs hid his battle with cancer for nine full months beforeÂ*sharing such informing with shareholders.Â* He recovered rapidly from the near-death experience andÂ*returned to work full-time only a few months later.Â* Since then, he's faced a balancing act between competing forces when it comes to his health.Â* On one hand, he's entitled to his privacy just like anyone else.Â* On the other, he's seen as an invaluable and irreplaceable asset to Apple -- one who carries a tremendous influence on the price of the company's shares, which are owned by the general public.
After appearing overly gaunt at this year's annual Apple developers conference, stories about Jobs' health and the resulting photographs threatened to overshadow the actual product announcements he made during the event.Â*Many believe the attention was justified. A report from last June suggested Jobs may be worth more to Apple than any other chief executive in the world, adding that the company's market cap could enter into a $20 billion free-fall should he be abruptly forced to abandon his leadership position.
Steve Jobs at Apple's 2008 developers conference | Copyright Reuters..
Possible Litigation
Thus, Wednesday's announcement that the Apple co-founder will step aside at least through June immediately sparked a 7 percent drop in the company's share price during after-hours trading, losing $6.03 to $79.30.
In a report titled "Apple could face lawsuits over Jobs' health," ReutersÂ*explores the possible legal response from unhappy investors who feel they were misled and suffered financially from Apple's tight-lipped approach to Jobs' well-being.
Former U.S. Securities and Exchange Commissioner Joseph Grundfest said such cases would be the first of their kind and very difficult to prove.
"I never underestimate the cleverness of plaintiffs attorneys but I personally am aware of no theory that would support a filing of a case," he said.
Plaintiffs attorney Steve Williams, who works for Cotchett Pitre & McCarthy, compared the way Apple may have "minimized" Jobs' illness to the way pharmaceutical companies are sometimes deliberately slow to disclose how their drugs are faring in government trials, a practice that does give rise to frequent lawsuits from investors.
"If [Apple] misled me by giving me the impression that (Jobs) was going to continue to lead the company, that could be an actionable statement," Williams said.
A different attorney threw cold water on that sentiment, saying there would have to be a "smoking gun" to counter Apple's contention that Jobs' medical situation was "constantly evolving."
"In the absence of some memo from a doctor that contradicts what he is saying, I would think it would be problematic for a plaintiff (to sue for disclosure lapses),"Â*said the attorney, who requested anonymity because his firm is litigating with Apple.Â* "It is not the same as looking at a piece of financial information at the end of the month."
Jobs touches on his near-death experience during a 2005 Stanford commencement address.
More Reaction
Meanwhile, the Industry Standard hasÂ*compiledÂ*a roundup of reaction from "the tech punditsphere," as the story puts it.
"Somewhere, right now, a plaintiff lawyer is preparing to file a lawsuit against Apple on behalf of shareholders who will claim they were deceived," said John Carney ofÂ*Clusterstock.Â* "Unless Jobs' health suddenly deteriorated in the last week, Jobs misled investors when he addressed the issue.Â* Issuing misleading statements to shareholders will certainly open Apple to potential shareholder liability."
"I think the market and most Apple observers are expecting it to be worse than they're telling us," said Barron's West Coast Editor Mark Veverka.Â* "Two weeks ago....they said nothing was wrong.Â* Now he's taking a leave of absence.Â* It creates more fear about the stock."
In a post at his website entitledÂ*"You are an idiot if you sell your Apple stock tomorrow", Robert Scoble wrote, "Apple has the best team, the best distribution, the best supply chain, the best management in the business... Apple is more than just Steve Jobs... Apple is fine and we'll all buy the next big thing that they do no matter who brings it to us."
Briefly: Not cancer
For its part, the New York TimesÂ*isÂ*citing two sources close to Jobs who say the present malady is not cancer, but "a condition that was preventing his body from absorbing food.Â* Doctors have also advised him to cut down on stress, which may be making the problem worse."
Comments
I don't see there duschbags suing all of these so called market ANALysts who come out with some crap about Apples sales figures which then cause the share price to fall, only to bounce back when the sales figures are released and are way higher than the ANALyst predicted.
Never mind that someone's own personal health is a very private issue, and it is certainly not Apple's job to be disseminating that. It's hard to prove that this was a long term issue that was known about all along, and not something that has recently been diagnosed, and even more recently advised to take time off work to cure.
It's impossible to please everyone and being a sue happy nation.... why bother trying.
I think if one looks carefully at the stock market it is possible to find a lot of stocks that have tumbled in this same period. The reality is that AAPL was widely held by institutions and hedge funds that had to produce lots of cash over the last three months of 2008 due to the credit crisis. I am not defending Apple per se, but to say that this health issue played a major role in the past years decline is to be either completely ignorant of the financial markets in general or to have an agenda based on the outcome of these lawsuits.
They can sue all they want.
I think I'll sue my wife because the coffee was cold, this morning. NOT.
What's the difference between a lawyer and a catfish?
One is an ugly, scum sucking bottom-feeder and the other is a fish.
Not possible. It takes a long time for chronic weight loss to become evident. In my father's case, it took a year. It has been several years now, and they still haven't figured out a treatment.
So I don't think anyone withheld anything.
I think I'll sue my wife because the coffee was cold, this morning. NOT.
You actually proved their point, not yours. IF your wife were company whose profits were based on consistently providing warm/hot coffee AND your wife went out of her way to assure investors that there would be absolutely no interruption in the supply of said coffee AND then she supplied cold coffee with no advance warning or explanation, THEN actually yes, you would be able to sue her and the SEC would investigate. Perhaps you need to learn a bit more about what scrutiny a company agrees to when they go public.
On the suits, it's such bull. Bank analysts have a built-in bias to the institutional investors that pay them for their "services" to drive the price down, such that those investors can then pick up the stock cheaply and make money off it when the stock rises again. Regardless of his public persona, Jobs is still a private citizen who cannot be compelled to release every detail of his medical records.
I don't think anyone withheld anything.
You're serious? This is Apple and Steve Jobs we're talking about. They get off on withholding information. They have an extensive history of suing people who leak information. They're secretive and have been for decades.
You have zero info on whether they withheld information but we have a pattern of behavior to indicate that they probably did. It's much more logical to go with the latter than your desire to believe they fully disclosed everything.
You're serious? This is Apple and Steve Jobs we're talking about. They get off on withholding information. They have an extensive history of suing people who leak information. They're secretive and have been for decades.
You have zero info on whether they withheld information but we have a pattern of behavior to indicate that they probably did. It's much more logical to go with the latter than your desire to believe they fully disclosed everything.
How would you prove they withheld anything?
Litigious vultures!
What's the difference between a lawyer and a catfish?
One is an ugly, scum sucking bottom-feeder and the other is a fish.
Heh
____________
You're serious? This is Apple and Steve Jobs we're talking about. They get off on withholding information. ...
This is ridiculous hyperbole. You have no way of knowing that is true or any factual support.
Not telling anyone about a product until they have finished designing it is not even close to the same thing as withholding information from stockholders. You are making a ridiculous leap of logic by joining the two.
One could make an argument that Steve Jobs personally is a "cagey" kind of guy, or that he might have been deluding himself lately as to the seriousness of his condition, but that's about it. Both of those are several orders of magnitude different from misleading the stockholders or withholding information from them.
You might also notice that so far you are the only person on this thread that has that opinion.
Speaking as a non-American, my view is that you people seem to be law-suit crazy down there. This kind of thing wouldn't happen in a million years in my country. No one would ever consider suing over something like this unless they could prove material damage as a result of intentional misdirection. I don't see how anyone could possibly prove either, thus it's a "nuisance" suit IMO.
You would need a "smoking gun" here. A document or some irrefutable evidence that supports the hypothesis that Apple willfully deceived the public in order to protect their company value.
You would also need to establish a consistent pattern of abuse in this area by Apple. Because Wall Street acts in peculiar manners that sometimes come with financial ramifications is no justification for receiving punitive damages. If so journalists, bloggers and anyone who's statement caused stock price duress woudl be sued into oblivion.
Clearly that doesn't happen and if shareholders want to turn a profit from their investment in Apple the worst thing to do would be to blow those profits in a case that is frankly unwinnable without having a clearcut case of Apple violations.
A human's health is unpredictable. A person can fall in a seemingly innocent manner and die from some unseen trauma caused by that fall.
Don't believe the hype. Apple's lawyers would bludgeon your attempt easily based on Steve Jobs's right to privacy
The US Constitution doesn't explicitly grant privacy but there is language that can be called upon to enforce privacy in some areas.
http://www.law.umkc.edu/faculty/proj...ofprivacy.html
Speaking as a non-American, my view is that you people seem to be law-suit crazy down there. This kind of thing wouldn't happen in a million years in my country. No one would ever consider suing over something like this unless they could prove material damage as a result of intentional misdirection. I don't see how anyone could possibly prove either, thus it's a "nuisance" suit IMO.
This is very true and I think is a HUGE problem in this country. Everyone is always out to get large sums of money and/or get whatever they want no matter who stupid the lawsuit may be. Sad part is...some of these people actually win! Its a filthy way to get rich, or get everything you want IMO. Were all a bunch of spoiled brats! Yes, I called myself a spoiled brat!
Part of the problem with Apple (as well as other companies) is they always just settle out of court. Which I don't think is always the best thing to do. Take these assholes to court and see how much they're willing to risk. Sure, this isn't always the best thing to do from a PR standpoint and therefore shouldn't always be done, but depending on the situation they should fight some of these stupid lawsuits placed against them. Then people shall see they can't just sue Apple (or other companies) to get whatever they want every time something disappoints them. Basically, companies are letting these people get away with suing them by just settling out of court every time instead of fighting these stupid frivolous lawsuits.
Maybe I should sue Apple because the MacMini hasn't been updated in over 2yrs.