What Did Steve Jobs Know, and When Did He Know It?

Joan Heminway has a great blog post on securities law aspects of the Steve Jobs health story. In part she argues:

At any rate, assuming the existence of a duty to disclose, both the general standard for materiality and the specialized probability/magnitude balancing under Basic v. Levinson, 485 U.S. 224, 232 (1988), for analyses of contingent or speculative information, may be applicable here. Is there a substantial likelihood that information about Jobs’ health is important to the reasonable investor in the market? Is there a substantial likelihood that disclosure of Steve Jobs’ health would be viewed by the reasonable investor as having significantly altered the total mix of information available to public investors? Finally, viewing information about Steve Jobs’ health as contingent or speculative information about his continued tenure as the CEO of Apple, does a balancing of the probability that he will not be able to continue to lead Apple against the magnitude of his departure from Apple (as an iconic founder/CEO) counsel disclosure? Yes, yes, and yes.

To read more of Joan’s views, check out her article on the materiality aspects of Personal Facts About Executive Officers.

You may also like...

1 Response

  1. A.W. says:

    It may take a statute to do this, but I think policy-wise, your right to medical privacy should trump all.

    And I am not sure you need a law. If the company knows he is ill, the law is clear: the company cannot disclose it. that is HIPAA and its myriad regulations. So how can you say that the company may not disclose it, but Steve Jobs must?

    Indeed, how far does it go? If one of their best employees in the marketing Dept is sick, and probably going to have to quit, does he have to disclose? How about a top salesperson in one of their stores? Theoretially all of those people affect the bottom line, so I guess no one has the right to medical privacy.

    What if Jobs was in fact secretly handicapped, a la FDR? Should we say he has to reveal a thing that federal law says he has a right not to be discriminated based on?

    And the whole concept is violative of the entire idea of a corporation: that it has a separate existance from even its president and founder. Apple will be there even if Jobs isn’t.

    And what is the harm to investors? All we need to do is make it clear that there is no guarantee that the current employess will remain employees and that will be priced into any transaction.