Apple, All This Could Have Been Avoided

I doubt there's one person in the world who's aware of Steve Jobs's apparently worsening health problems and doesn't feel bad about it. But Apple is a public company, and the health of a chief executive -- especially one so integral to that company's image, vision and performance -- can be treated as a private matter only up to a point.

It's a tough, awkward situation, no doubt. But Apple's obfuscation and clumsy handling of this matter has fueled speculation and rumors and left the public and investors wondering what else they don't know. They have every right to wonder. I'm not sure why being honest and up-front never was an option. If it had been, we wouldn't be where we are today:

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.

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. Bloomberg News reported last week that Jobs is considering a liver transplant as a result of complications after treatment for cancer, according to people who are monitoring his illness.

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."

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.

"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."

Given that this is a "new area of law," I'd say it's unlikely the SEC will allege improper or illegal behavior on Apple's part. If anything, though, it should go down as a classic case of poor corporate public relations. You can say that's unimportant and trivial, but I suspect Apple's shareholders have a different opinion. And if the company and its spin doctors think that doesn't matter, they're in the wrong business.