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SEC Opens Inquiry of Apple Disclosures

 
By Ken Sweet
FOXBusiness
     

    The Securities and Exchange Commission has begun an inquiry into computer company Apple (AAPL) regarding the company's disclosures on the health of its Chief Executive Steve Jobs, The Wall Street Journal reported Wednesday, citing people familiar with the matter.

    This comes after Jobs said last week he would take a temporary leave of absence from the company for health reasons that were "more complex than ... originally thought."

    It was not immediately clear if the SEC was doing an informal or a more serious formal inquiry into Apple. A company spokeswoman was not immediately available for comment.

    Rumors surrounding Jobs and his health have swirled for months now as his public appearances have shown him thin and unhealthy looking. Apple repeatedly has said that Jobs was not having major health problems and that his health should not be a concern for investors.

    However, Wall Street investors, corporate governance lawyers and the media have repeatedly called for more information regarding Jobs health. Jobs, who is a pancreatic cancer survivor, is considered the definitive leader of the iconic computer company and a leadership succession plan for Apple if Jobs were to leave or become unable to run the company has not been made public.

    Companies are required by law to disclose to investors about material changes that may impact its business. Jobs' health, it has been argued, falls under the umbrella of a necessary item for Apple to disclose because of his prominent role inside the company. A SEC inquiry could indicate that the government possibly believes Apple misled investors regarding Jobs' health.

    Worries regarding Jobs’ health began a year ago and escalated in December when Apple said Jobs would not appear at MacWorld, which a closely-watched trade show that Jobs had appeared at every year since returning to the company in 1998. Apple said Jobs' reason for not appearing at Macworld was that the company was pulling out of the trade show, not because of his health. Apple has repeatedly said that Jobs’ health is a private matter and not material enough to disclose completely.

    Last week, Jobs said in a letter that his health issues were "more complex" than the original claim of a hormone imbalance and that he would take a leave of absence from the company.

    This is not the first time the SEC has done an inquiry into Apple. In 2007, the SEC settled with Apple regarding back-dated stock options given to Jobs and other members of top management.  Apple was not charged with wrongdoing, but the company's former chief financial officer had to pay $3.5 million in penalties and fees.

     

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