Apple Inc (AAPL)

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MW UPDATE: Apple CEO Tim Cook may have violated SEC rules with Jim Cramer email
By Jennifer Booton , MarketWatch

Lawyer: 'The SEC will undoubtedly want to take a look at this'
Apple Inc. CEO Tim Cook's decision to give a rare mid-quarter update on the company's performance in a private email to CNBC's Jim Cramer on Monday may have violated federal disclosure rules, lawyers said Monday.

In the email, confirmed by Apple (AAPL) to MarketWatch, Cook said that iPhone activations have accelerated over the last few weeks, despite growing economic concerns in China and the government's moves to devalue the Yuan. He also said Apple's App Store recorded the 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.

However, the private disclosure, which was tweeted out by CNBC reporter Carl Quintanilla and then read on air at CNBC, may have violated the Securities and Exchange Commission's Fair Disclosure regulation, white-collar lawyers told MarketWatch. The rule, deemed murky and often contested by companies, addresses how publicly-traded companies disclose material non-public information to certain individuals or entities.

"The SEC will undoubtedly want to take a look at this," said Thomas Gorman , a partner at Dorsey focusing on defending SEC and other regulatory investigations. At the very least, the SEC will contact Apple to seek context for the disclosure, he said.
(https://twitter.com/carlquintanilla/status/635799629947404288)
Bill Singer , another lawyer and owner of the BrokeAndBroker.com (http://www.brokeandbroker.com/) industry blog, said the SEC has long grappled with regulation in the age of social media, and will likely investigate Cook's email to determine whether the CEO overstepped his bounds with the private exchange.

"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," Singer said. "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."

The SEC declined to comment on the Cook email and any investigation it may perform.

In 2013, the SEC ruled that companies could make public disclosures on social media platforms such as Facebook Inc.

(FB) and Twitter Inc. (TWTR) after Netflix (NFLX) CEO Reed Hastings disclosed record streaming user growth via a Facebook post (http://blogs.wsj.com/marketbeat/2013/04/02/sec-clears-netflixs-reed-hastings-says-social-medias-ok-for-sharing/)that sent the company's stock skyrocketing.

Shares of Apple climbed 1.7% to $107.51 in recent trade, paring losses after the stock fell as much as 13%
(http://www.marketwatch.com/story/apple-leads-decline-in-dow-jones-industrial-average-2015-08-24) earlier in the session. Its stock is down 19% in the last three months, underperforming the broader Dow Jones Industrial Average's 11.7% decline. The Dow was down another 150 points on Monday.

- Jennifer Booton ; 415-439-6400; [e-mail]
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08-24-15 1310ET