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  • Apple CEO Tim Cook Could Potentially Face SEC Scrutiny for Violating Regulation FD


    A recent email that Tim Cook sent to CNBC analyst, Jim Cramer, could put the Apple CEO in a sticky situation with the Securities and Exchange Commission. In the email, Cook ended up revealing material information about Apple’s growth in China in an attempt to calm Wall Street fears that China’s continued economic slowdown would negatively impact Apple’s growth in the country. The Cupertino California company’s shares ended up opening the day under $100 but quickly rebounded throughout the day.

    In his message, Cook wrote that Apple is continuing to see “strong growth” in China over the past two months and revealed that iPhone activations are accelerating alongside the Chinese App Store performing very well. Shortly afterwards, fellow CNBC anchor, Carl Quintanilla posted the email to Twitter and many began to question whether Cook had violated SEC Regulation FD. This regulation in particular prohibits publicly-traded companies from disclosing material company information privately without simultaneously releasing it publicly. It states the following:

    The regulation provides that when an issuer, or person acting on its behalf, discloses material nonpublic information to certain enumerated persons (in general, securities market professionals and holders of the issuer's securities who may well trade on the basis of the information), it must make public disclosure of that information.
    Securities lawyer, Bill Singer, told MarketWatch the following regarding the matter:

    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. 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.
    Even if the SEC does launch an investigation, Cook and Apple seem unlikely to face any large penalties, if any. This is likely the case considering Regulation FD is one of the most often-contested securities regulations in the books and Cook doesn’t have any prior history when it comes to playing by the book.

    We’ll have to wait and see what happens, if anything.

    Source: Carl Quintanilla (Twitter), MarketWatch, SEC
    This article was originally published in forum thread: Apple CEO Tim Cook Could Potentially Face SEC Scrutiny for Violating Regulation FD started by Akshay Masand View original post
    Comments 2 Comments
    1. Ambi_Valence's Avatar
      Ambi_Valence -
      Schoolboy error.
    1. dsg's Avatar
      dsg -
      Stupid mistake. Also iDevice activations was probably due to people scrambling to get on the latest jailbreakable firmware before the window closed