Cult of Personality

News of Steve Job's health problems may cause legal problems for Apple.

Although securities lawsuits usually arise from companies' false statements about material aspects of their businesses, Apple could run into trouble by falsely allaying investors concerns about whether Jobs would remain at its helm.

It would be a tough sell, though.

Plaintiffs and defense attorneys said this type of fraud allegation would be hard to prove and a first of its kind.

"It is extremely difficult because it is the most private part of his life," Steve Williams, a plaintiffs attorney for Cotchett Pitre & McCarthy, said. "At the same time, Apple is Steve Jobs."

Former U.S. Securities and Exchange Commissioner Joseph Grundfest said Apple crossed no line if it failed to provide thorough disclosures about Jobs' health unless company insiders traded on the knowledge before it was disclosed publicly.

No securities rules and no legal precedents directly address CEO health but Grundfest acknowledged that investors could argue that Jobs' status as CEO was critical to their decision to invest in Apple.

I italicized Mr. Williams' quote because that is the heart of the matter. I'm trying to think of another example of a company as heavily defined by the boss as Apple. One that remotely fits was Lee Iacocca at Chrysler in the 1980's, and for similar reasons; both men pulled their companies from the brink with innovative products. But Iacocca never dominated the operational culture of his company or attained cult figure status like Jobs.

Like Chrysler, Apple has always had to be nimble and inventive to stay afloat, and Jobs is seen as the driving force. Apple is in a far better position that Chrysler, which may be done. But Apple would do well to remember what has kept them going; innovative products.