An Apple a Day Keeps Shareholder Suits at Bay: An Examination of a Corporate Officer’s Legal Duty to Disclose Health Problems to Shareholders

Abstract

This Article examines both constitutional and practical problems with proposed regulation to require corporate officers to disclose health problems to shareholders. In doing so, the Article addresses the following questions, which are especially timely given the recent controversy surrounding Apple CEO Steve Jobs: To what extent should officers of public companies be required to disclose personal health problems to shareholders? Does a timely failure to disclose such information constitute securities fraud if the stock price is adversely affected once the information becomes public? Can shareholders' rights to accurate information relevant to a company's likely future performance trump an officer's right to privacy? To what extent do the answers to these questions depend on how closely the officer's identity is aligned with his/ her brand, i.e., how "iconic" the officer is perceived to be? Are these issues for regulators to address ex ante or the courts to handle ex post? And in either case, can an objective rights-balancing framework be developed?