LOS ANGELES AND NEW YORK — Steve Jobs' medical condition turned out to be more serious than Apple Inc. officials had previously acknowledged -- and that has analysts and legal experts questioning whether the company ran afoul of federal securities rules.
Apple had disclosed in early January that Jobs had a "hormone imbalance" and would take a leave of absence, but never said he was so sick that he needed a liver transplant.
For The Record
Los Angeles Times Friday, June 26, 2009 Home Edition Main News Part A Page 4 National Desk 1 inches; 31 words Type of Material: Correction
Steve Jobs: An article in Thursday's Business section about Apple Inc.'s disclosure of Chief Executive Steve Jobs' medical condition said Jobs founded Apple in 1979. Jobs founded the company in 1976.
Companies are not required to divulge medical details about executives, lawyers said. But they are required to disclose "material" information, which is defined as what a reasonable investor would need to know to make an informed decision on buying or selling stock.
"If they tried to lessen the disclosure and make it misleading by omission, that's just as bad as telling something that flat isn't true," said Jeffrey C. Soza, a securities lawyer at Glaser, Weil, Fink, Jacobs, Howard & Shapiro in Los Angeles.
The Tennessee doctor who led the transplant team said this week that Jobs was "the sickest patient on the waiting list" at the time a donor liver became available.
Dr. James D. Eason said that Apple's key man had tested high -- more likely to die from the condition -- on an index that rates patients with end-stage liver disease.
But all that investors or the public knew came from two brief statements on Apple's website. The first, about the hormone imbalance, was followed a week later by one from Jobs saying his health issue was "more complex" and would require a six-month leave.
The Cupertino, Calif., company has maintained that the initial statement was enough to satisfy disclosure rules imposed on publicly traded companies. But some analysts aren't so sure. Intentionally downplaying the extent of such an illness could set Apple on the wrong side of securities laws, Soza said.
Investor Warren E. Buffett agreed that Apple had been less than forthright. "Certainly Steve Jobs is important to Apple," he said in a CNBC-TV interview Wednesday. "Whether he is facing serious surgery or not is a material fact."
The state of Jobs' health has long been a subject of popular discussion, including his surgery for pancreatic cancer in 2004 and his widely observed weight loss that preceded his leave of absence. With that information in the public sphere, some experts say Apple fulfilled its legal obligation by saying that Jobs was on medical leave.
