Apple’s chief executive Tim Cook may have violated federal disclosure rules when he privately emailed a mid-quarter update to CNBC’s Jim Cramer, according to a MarketWatch article Monday.
In the email, the text of which was posted on MarketWatch, Cook wrote that iPhone activations have accelerated over the past few weeks, despite growing economic concerns in China and the government’s moves to devalue the yuan. He also wrote that Apple’s App Store had recorded its best performance of the year in China during that time.
“Obviously I can’t predict the future, but our performance so far this quarter is reassuring,” Cook wrote.
The private email, which was subsequently tweeted by CNBC reporter Carl Quintanilla and read on air at CNBC, may have violated the Securities and Exchange Commission’s fair-disclosure regulation, according to attorneys.
“The SEC will undoubtedly want to take a look at this,” attorney Thomas Gorman told MarketWatch. At the very least, the SEC will likely contact Apple to seek context for the disclosure.
“I certainly could see, in some circumstances, where the SEC would want to review the conduct and think it is a violation of Reg FD,” added Bill Singer, another lawyer and owner of the BrokeAndBroker.com industry blog. “It constitutes a disclosure giving certain individuals the benefit before it was percolated by the rest of the public, during a fast-moving, extraordinary market.”
Typically media representatives “get a pass under the disclosure rules,” but Cramer also co-manages a portfolio, Action Alerts PLUS, that has a long position in Apple, according to The Street.
Image: LeMagIT, via Flickr, CC BY-SA 2.0