Somewhere, right now, a plaintiff lawyer is preparing to file a lawsuit against Apple on behalf of shareholders who will claim they were deceived by the company’s statements about the health of chief executive Steve Jobs.
When rumours began to circulate about Jobs health following news that he wouldn’t appear at the Macworld Expo last week, Jobs issued a statement that sent the stock higher. He also promised that he would have no more to say about his health, implying that his condition was stable enough that it would not need to be addressed again.
Now we know that this was very probably untrue. Unless Jobs’ health suddenly deteriorated in the last week, Jobs misled investors when he addressed the issue. Perhaps he was himself misinformed. Nonetheless, issuing misleading statements to shareholders will certainly open Apple to potential liability.
The outcome of such shareholder lawsuits would likely turn on questions of who knew what and when they knew it. Even if Jobs did not have full information about his poor condition, he may have violated his duties to shareholders. It’s not enough to simply avoid telling outright lies. Executives at public companies are held to a standard that requires them to avoid making materially misleading public statements if they lack an appropriate level of information.
No doubt Jobs and Apple are getting ready to defend the statements they issued nine days ago.