Steve Jobs Health Ping!
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Posted on 01/21/2009 12:06:51 PM PST by Swordmaker
"U.S. regulators are examining Apple Inc.’s disclosures about Chief Executive Officer Steve Jobs’s health problems to ensure investors weren’t misled, a person familiar with the matter said," David Scheer and Connie Guglielmo report for Bloomberg.
"The Securities and Exchange Commission’s review doesn’t mean investigators have seen evidence of wrongdoing, the person said, declining to be identified because the inquiry isn’t public," Scheer and Guglielmo report.
"Investors have been pressing for information on Jobs’s health since June, when he appeared noticeably thinner at an Apple event. The company’s stock whipsawed this month after Jobs, who battled pancreatic cancer in 2004, said he would remain CEO while seeking a 'relatively simple' treatment for a nutritional ailment. Nine days later, Jobs said he would take a five-month medical leave after learning his health issues were 'more complex,'" Scheer and Guglielmo report.
"'The good news flipped by the bad news makes one wonder what Apple knew,' said James Cox, a law professor at Duke University in Durham, North Carolina. 'It’s not surprising for the SEC to come in and look afterward, given the pressure and publicity regarding their handling of a lot of cases,' such as criticism of the SEC’s response to Bernard Madoff’s alleged $50 billion Ponzi scheme," Scheer and Guglielmo report.
"To bring any case, the SEC would probably have to show the company tried to benefit by withholding information about an unambiguous diagnosis, said Peter Henning, a former federal prosecutor and SEC lawyer who now teaches at Wayne State University Law School in Detroit," Scheer and Guglielmo report. "'It would be difficult, and certainly a new area of the law,' Henning said. 'You would have to pin down exactly what they knew, and with a health issue -- unlike a merger or a decline in revenue -- it’s not subject to definitive answers.'"
"Corporate governance experts say shareholder interest in Jobs is unusually high because he is considered synonymous with Apple. He returned as CEO in 1997, turning the once-unprofitable maker of Macintosh computers into a successful consumer- electronics company with the iPod media player and iPhone. Jobs established himself as the face of Apple, serving as the main pitchman at every major product announcement over the past decade while yielding little time to other top executives," Scheer and Guglielmo report.
MacDailyNews Note: Steve Jobs has never appeared in an Apple commercial.
Scheer and Guglielmo continue, "Apple’s board may have met its obligations to shareholders by notifying investors that Jobs will be on leave, said Edward Smith, a corporate governance expert at Chadbourne & Parke in New York... The board isn’t obligated to provide specific details about the nature of Jobs’s illness, Smith said. 'It’s really an issue of the ability of the CEO during the period of his ill health to continue to advise and consult and manage the affairs of the company,' he said. 'Someone might be able to do that from a hospital bed for several weeks just as well as they may do it from the office.'"
Full article here.
MacDailyNews Take: Besides the point that there's nothing there — doctor's can and do change their minds and modify diagnosises over the course of minutes, to say nothing of days, weeks, months, or years — the current SEC couldn't investigate its way out of a wet paper bag. The SEC ought to be investigating "analysts" who attempt to manipulate prices rather than analyze companies and bring back the Uptick Rule immediately which would go a long way towards decreasing the negative manipulation of stocks based on rumors and intentionally misleading "analysis."
show trial...
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I thought Jobs was understating his illness all along, but I’m terribly pessimistic regarding Apple. We’ll see if this gets swept under the rug and made “okay” somehow, like the options backdating.
I thought they made a big mistake bring him back in the first place.
Seems I was right.
Sadly it is. Not because it made sense to pretend that he was the only talented one there, but because it made for good copy for Apple’s fans and the press.
Now it may be coming back to bite them big time.
Or the complete opposite of right. But definitely one of those two options.
Maybe one or the other...perhaps...(chuckle)
I guess the SEC has all the time in the world for Jobs but not Madoff’s record of red flags. Our system is so messed up.
You always choose the worst connotations to things where ever Apple is concerned, Troll. Facts actually are more important than your unsupported opinion.
The "options backdating" was anything but "swept under the rug." It was headline news for over a year. Several stockholder lawsuits were tossed out of court because the plaintiffs could not demonstrate that Jobs' compensation had in any way damaged them... and in fact, the judge in the cases commented that Jobs had enriched them far beyond the few pennies per share they were claiming might have been the impact of ALL of the backdated options for ALL of Apple's employees who received them.
Both an internal and an SEC investigation were made of Jobs involvement in the option backdating, which was and is perfectly legal so long as it is properly accounted, and Jobs was found to have not been involved. He had properly recused himself from board meetings where his compensation was discussed. They found he did suggest some dates for back dating options for other employees, but he was not instrumental in giving them, setting the dates, or voting on the compensation packages. and, the SEC found, he properly sought and relied on legal advice.
An Apple executive was fired over the backdating. Nancy Heinmen, Apple's Chief Legal Officer was fired, indicted by SEC, and eventually fined $3 million for some shenanigans she did to facilitate the options. She failed in her duty to properly advise the board of the legalities, but most importantly, she took it on herself to try and fix a small problem with the fact the board had voted on Jobs' options on August 29, but the paperwork was not finished until sometime in October, after the start of a new fiscal year. She found that company by-laws require such stock options to be granted in the fiscal year the board voted them... so instead of calling a new board meeting to revote the options, she created minutes for a board meeting in October for a meeting that never occurred, showing a duplicate vote, She then selected a date for the options that the stock price was the lowest of the new fiscal year but still FAR above the price on the date on which the options were first approved in August. Because of these shenanigans and the delay, Jobs actually LOST money from what he would have received had the options been granted when originally voted.
Heinman is appealing the decisions.
Fair enough except that no decision was ever made as to whether or not Apple was liable because plaintiffs could prove no damages. So the question as to their “ethical” lapses was never answered. Now they’re being investigated for possibly misleading the public on Steve-O’s illness to bolster the stock price? Who is running the company? The Clintons? Shenanigan after shenanigan from these people. If it walks like an ethical trainwreck and it talks like an ethical trainwreck...........
Kind of hard to prove damages since at the time, AAPL stock was rocketing into the stratosphere.
1. The only photos I've seen of Jobs look bad. He looks seriously ill in them.
2. People keep referring to his MacWorld appearance, which was something like a year ago. Has he not been seen at all? It seems like some paparazzi could make some big dollars getting shots of him getting into a car, leaving his house, or coming out of a doctor's office. If he really hasn't been seen by anyone except Apple personnel, his doctors and his family, that's telling.
3. The speculation about his health hurts the stock more than bad news would, IMHO. Sword, you keep up with all things Apple, is Jobs doing a Howard Hughes now?
Oh, one last thought. If a Jobs appearance would reassure people, I think he would have appeared in public. OTOH, if Jobs looks worse than he did at MacWorld, ...
Sure, I suppose its okay to cook books then as long as it doesn’t bankrupt the company. Just because their crookery made the stock rise doesn’t mean their hands are clean, it just means they have good lawyers.
Apple just reported that sales and profit exceeded expectations in the recent quarter...
Option backdating wasn't an issue for Jobs since he made no money. It was mainly an issue of the post-Enron accounting changes.
Here, no person is required to disclose health issues, and there are definitely laws against a company releasing health information about its employees and officers. Apple could have said absolutely nothing about his health, only releasing that he will be taking leave.
The only way this is SEC business is if Jobs purposely manipulated the release of health information in order to profit from stock price changes -- basically the use of insider information. I highly doubt you will find that happened.
I thought they made a big mistake bring him back in the first place.
Seems I was right.
What, was the Mac OS becoming more popular by the day when they brought Steve back? Did Apple have a ton of cash on hand back then, as they do now? Did AAPL have the iPod and the iPhone to complement the Mac back then? Is the market cap of AAPL far lower than that of Dell, as it was when Jobs came back?Yeah, I guess you were right back then.
</sarcasm>
It was answered by the SEC. The only unethical action was by one lawyers, and her and the CFO who didn't catch her actions have been taken care of. Apple basically handed them over to the SEC after its own internal investigation. You forget that backdating is legal. How it gets reported is the only issue, and the rule change caused a lot of confusion that hit a lot of companies.
The civil suits were standard ambulance chasing. One of the suits was by a guy named Martin Vogel, who had sued Apple a couple years before only to have it thrown out with prejudice (can't ever refile). He was just sitting around waiting for an excuse for another go at the Jackpot Justice Lottery, and the backdating gave him one.
I think you are missing the point of a shareholder suit, which is to compensate shareholders for the loss of value in their shares due to corporate malfeasance, or at least damage to the company that could result in loss of value. Obviously neither applied here, so no grounds exist for a suit.
The issue of cooking the books is one for the SEC, and that has been settled.
> I thought Jobs was understating his illness all along...
Jobs is IMO a very foolish person with regard to his personal health -- way too "groovy" and NewAge for my liking. I doubt he was intentionally understating his illness, I just think he was being oblivious due to thinking he could cure it with herbals and meditation.
Full disclosure: I use herbals and meditate, but I also use Neosporin and get a PSA done every few years (I'm 57 and male). No one discipline has all the answers.
> but I’m terribly pessimistic regarding Apple
No, really? I'm shocked, THC, I never would have guessed. ;-)
It's a free country, be as pessimistic as you like. I'm pessimistic about Jobs' long-term prognosis, but I think Apple will do just fine, with a few hiccups as they adjust.
I attended a Memorial Service last Saturday for a long time friend who starved himself to death in spite of medical intervention and his acknowledgment of his affliction. Even after he was fitted with a feeding port he rejected food. It was some strange compulsive behavior and I didn’t catch the name of it...
Jobs does look gaunt. However, some of the pictures have been enhanced to make him look even worse. Time Magazine was particularly egregious in deliberately distorting a picture of Jobs to make him appear even more gaunt in an article about his health:
After they were caught at distorting Jobs' appearance (picture on the left), Time quietly replaced the picture with the one on the right.
2. People keep referring to his MacWorld appearance, which was something like a year ago.
Jobs gave the keynote address at the World Wide Developers Conference in June and the photo above was taken in October 2008.
3. The speculation about his health hurts the stock more than bad news would, IMHO. Sword, you keep up with all things Apple, is Jobs doing a Howard Hughes now?
Possible, but I doubt it. I think that Jobs had every intention of following through with his announced plans when his doctors hit him with something that they had probably had just discovered... the results of a test or something... that changed his plans from treating his problem with diet changes to something that requires more drastic treatment.
Exactly what evidence do you have in your possession that Apple's management "cooked books" and participated in institutionalized "crookery?"
Do you know something the SEC investigators don't? If you don't, you certainly are playing fast and loose with words that could be considered libelous and/or slanderous. These allegations were thoroughly investigated over a three year period.
The granting of back-dated stock options as a form of employee compensation was practiced by over 5000 major companies. The vast majority of the stock Apple back-dated was for general employee grants that were back-dated to the end of trading on the Monday of the week the employees were hired. Steve Jobs, who gets $1 a year in salary, was granted The problems occurred because of major changes in the Generally Accepted Accounting Practices (GAAP) standards between the time the Stock Options were granted and the time of all the hoopla, when Congress passed a very ill considered bill called Sarbanes-Oxley in 2002. In addition, Apple found and reported the irregularities on its own, after an internal audit looking for past actions that could be impacted by the newly changed GAAP rules. After their internal audit uncovered some problems, Apple itself turned all of its records over to the SEC and cooperated completely with the SEC investigators.
Are these the actions of an institutionalized culture of "crookery" that would "cook the books?" And, exactly how do you propose that "crookery" made Apple's stock rise?
. . . it just means they have good lawyers.
Ironically, it was Apple's Chief Legal Officer who was fired and later fined $3 million for not doing things properly.
Steve Jobs, who gets $1 a year in salary, was granted seven million share options, restricted for three years, at the strike price (IIRC) as of the closing of stockmarket on October 19th... but the board vote was actually taken at a board meeting on December 18th of that year.
The Board had actually voted the options in August ... but delays, a vacation in the legal department, and sheer error, resulted in the paperwork for the option grant to Jobs not being completed until early October. Ordinarily, that would not be an issue, but Apple company by-laws require that such options be granted in the fiscal year the board voted them. Apple's fiscal year ends at Five PM on the last Saturday in September. Thus, the stock grant which was signed and delivered on October 19th (incidentally, at a far higher strike price than it would have had the grant been completed before the end of the Fiscal year) was no longer '"authorized" having timed-out. Nancy Heinman, Apple's Chief Legal Officer decided that to make things kosher, she would cobble up minutes for a telephone meeting of the Board of Directors—that supposedly occurred the day before the options were granted—showing a vote for the grant. She apparently figured that these minutes could be validated—and the "vote" made official by the Board accepting them (after all, it merely duplicated the already voted on action from August)— and these bogus minutes put into record with a vote at the next scheduled BOD meeting in December. Unfortunately for her, the board declined to rubber stamp the minutes for the non-existent meeting, and instead merely voted Jobs' options again, and back-dating them to the date the transfer actually occurred.
Two years later, a year before the strike date when he could exercise his options, Jobs cancelled the options in exchange for a transfer of $70,000,000 in three year restricted shares of Apple Common Stock.
Has nothing to do with product, everything to do with the man.
Has nothing to do with product, everything to do with the man.
I never said I liked the man personally, and I certainly don't like his politics nor those of AAPL board member A. Gore.But when you invest in a company, you invest in the products the company will attempt to sell, not the CEO's politics or his personality. So the board was dead-on right to hire Steve Jobs; it was the only real chance to save the company from continuing the way it was headed, which was well on its way toward bankruptcy.
We disagree, no big deal.
Do you know something the SEC investigators don’t? If you don’t, you certainly are playing fast and loose with words that could be considered libelous and/or slanderous.
Get real.
I am. It's you who seems to prefer disproved allegations to investigated facts.
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