Though the Securities and Exchange Commission rules governing selective disclosure and insider trading contain no provisions relating specifically to the health of executives, publicly traded companies must nonetheless manage the potential implications of their key executives’ health on perceptions of the company’s future success as well as their propriety in disclosing information material to investors. This can be a difficult task, as an employer disclosing particulars about an employee’s health seems to run contrary to the special privacy protections given health information in the U.S., yet such information can undeniably affect investors’ decisions. Recently, the Securities and Exchange Commission launched a probe to evaluate statements made by Apple, Inc. regarding the health of CEO Steve Jobs. While not yet a formal investigation, this unprecedented evaluation of health-related disclosures raises significant issues about how such information should be treated and how the rights of investors are to be weighed against the rights of executives. Additionally, if this practice becomes regular, it could lead to unfair and burdensome erosions of executives’ rights to privacy and medical autonomy.
Background
In 2003, Jobs was diagnosed with a rare form of pancreatic cancer that, unlike most forms of the disease, could be treated reliably and successfully with a surgical procedure. Against the recommendations of his doctors, Jobs initially tried to address his illness by adopting a special diet regimen. However, nine months after his diagnosis, he was forced to accept the prescribed treatment when a scan revealed that the tumor in his pancreas had grown. Apple broke the news about Jobs’ illness and surgery on the heels of the ...
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March 20, 2003, Richard Scrushy, the former chief executive officer of HeathSouth Corporation, was charged by the Securities and Exchang...
Sir Steve Jobs, the almighty co-founder of Apple started apple dreaming big. The Harvard College dropout carried through with that dream. According to Leander Kahney, author of “Inside Steve’s Brain,” “apple went public 1980 with the biggest public offering since 1958” (2008), this offer proved successful as apple soon became a super power. Apple suffered a fall out though, but Steve Jobs came back and rescued them, reviving them to their previous stature.
Darrell Issa persuades governors that Apple needs to keep their customer information to themselves. Through using the rhetorical devices of statistics and historical evidence, he addresses the fact that Apple should not be forced to unlock these phones. This could not only keep privacy, but also create a safe environment for people. He points out the privacy act passing before in order to persuade the governors to need to think what they did and what they need to do in the future. They should not force Apple to unlock an iPhone because it provides a backdoor for the lawbreakers.
Madura, Jeff. What Every Investor Needs to Know About Accounting Fraud. New York: McGraw-Hill, 2004. 1-156
In an age where instant access to information has influenced the privacy workplace model, which once prevails over what were inalienable assumptions of privacy is no longer a certainty in the workplace. Some companies require employees to sign confidentiality agreement to protect their patents, formulas, and processes. There are instances where companies dictate a “no compete” clause in their hiring practices, to prevent an employee from working for competitors for typically two years without legal implications. While these examples represent extents, employers go to protect their company’s privacy; companies do not go to that extent to protect the privacy of their employees.
Within the last decade Apple has become one of the largest growing companies in the world and the largest valued company in the United States. According to a recent article in The Guardian, a global financial news website, “Apple set a record by becoming the first company to be valued at over $700bn (£446bn).” (Fletcher, N. 2014) This comes as no surprise to the average computer aficionado and shareholder as Apple has been making a name for itself since its inception. From its earliest Macintosh models to today’s iPhones, Apple has been a trailblazer for software, technology and revolutionizing the way we communicate on a Macro level. Their dedication to innovation, quality and service has made them
Worstall, T. (2013, March 01). Solving The Principal Agent Problem: Apple Insists That Executives Must Hold Company Stock. Retrieved from Forbes: http://www.forbes.com
Whereas, the actions of Sam Waksal, CEO of ImClone, were considered insider trading and illegal. Insider trading is when information is used to make a timely sale when the public doesn’t have access to the same information (Boatright, 2013). The law requires that if the information is considered important by a reasonable investor then it is illegal insider trading (Henning, 2012). Mr. Waksal knew about the FDA rejection of his company’s drug trial and tried to sell all his stocks before the public got a chance to review the same information and perhaps be able to execute similar sell orders.
Insider trading has been a commonly discussed topic since Martha Stewart was accused, tried, convicted, and served a prison term for her involvement with the Inclon trading scandal. However, the definition of the term “insider trading” is not necessarily always connected with illegal activity. As a matter of fact, in some jurisdictions, “insider trading is no crime. Traditionally, it has been an expected, and perfectly acceptable prerequisite of certain sorts of employment.”(Insider Trading). But since the latter part of the 1960’s, stricter enforcement of insider trading practices have been put into place because of financial scandals.
Insider trading has been occurring since the beginning of the stock market. There are opposing viewpoints as to whether or not this activity is ethical or not. The underlying issues at play are those of fairness versus efficiency. Those who support fairness in the market argue that because insider trading makes use of material information that is not available to the public that this activity gives an unfair advantage those who possess such information. The opposing viewpoint is that insider trading makes the market more efficient because information is the key to market efficiency. So the question is, “Is insider trading unethical.” To shed some light on this question this paper will analyze the Mark Cuban insider trading case using two ethical theories. The first is the theory of utilitarianism and the second is the theory of the categorical imperative.
(6/3/2004) 21 Privacy Rights Clearinghouse (2002) Employee Monitoring: Is There Privacy in the Workplace? . (6/3/2004) 22 Privacy Rights Clearinghouse (2002) Employee Monitoring: Is There Privacy in the Workplace? . (6/3/2004) 23 Privacy Rights Clearinghouse (2002) Employee Monitoring: Is There Privacy in the Workplace? .
Apple can adopt the strategy to portray a picture of a not so conducive less profitable market, which could discourage new entrants from picking that path as they will be demotivated by the low return on investment resulting from low profitability levels. In order for apple to create a niche for t numerous products, it needs to adopt and implement such bold strategies of defense to protect their interests and continue to be profitable and successful (Ideavist, 2011). Entry of a new company into the technology sector would spell doom for most companies already struggling for market share as better priced and reliable products could imply consumers would shift their preference to the new entrant leading to a negative volume of sales stir for most already established companies. Another strategy that could be employed as part of Apple’s defense could be the pre-entry strategies that make it even harder for new entrants to compete and enter into the sector and this involve continuous improvement for their products, covering
Shareholders are important to the continued success of corporations all around the globe. An ethical issue that could have impacted the relationship that Apple had with its shareholders is the less than upfront approach that Apple took in regards to the health of Steve Jobs. In an article found on Time.com Steve Jobs is referred to as “a modern-day Thomas Edison.” As stated in the article it is believed that Apple was not completely honest about the condition of Steve Jobs health as far back as 2004, and also again in 2008 when he took time away from the company due to health concerns. It is also alleged that this could have had an impact on the shareholders and the decisions made in regards to their stock in the company (Berr, 2011). This one of the many ways that Apple could be seen as a company with something to hide. Although, Apple has tried to be more transparent with how they conduct business with their suppliers, as well as how their suppliers treat employees. One of the ways they have tried to do this is by allowing outside monitors to investigate their production facilities in China (Moore, 2012). They have also shown some good faith in publishing the list of their suppliers to the public in 2012 (Moore, 2012). The Suppliers Code of Conduct that was mentioned earlier has had an impact on the relations that Apple has with many of their suppliers since its implementation. As of
Albert has committed insider trading by accepting information from his uncle that was obtained illegally. This is also highly unethical to use this information. The second unethical behavior Albert conducted was to ignore or not say “no” to Barry’s offer to put through his and Mary’s trades before other clients and also illegal. Albert should not have traded his uncle’s and his uncles friends’ stocks into high-risk markets. This was illegal as well as unethical and may be a violation of the “consumer protection law” since Allen did not have permission to trade in non-risky stocks. The Federal Trade Commission (FTC), another governing body, may, work in tandem with the SEC to investigate the wrong doing in this case since it involves
From 1980 to 1996, Apple’s competitive range in the PC industry was rocky. Although Apples products were unique and well built, they were overpriced compared to competing products from IBM and others. As competitor prices dropped, Apple prices stayed the same and the company saw a decline in sales as customers opted to purchase from its competitors. John Sculley, former CEO of Apple, took many steps to improve the company’s competitive advantage. One of those steps was to compete with price by producing a low-cost computers that appealed to a mass-market. The second step was to form an alliance with rivals IBM and Novel in order to create new operating systems and applications...