Tim Cook’s email to Jim Cramer may have violated SEC rules, say lawyers


The email Apple CEO Tim Cook sent to CNBC analyst Jim Cramer, and which was read on the air, may have violated Securities and Exchange Commission regulations, according to lawyers speaking to MarketWatch. The regulations are designed to ensure that information that may impact a company’s share price is made available to the public in a fair and open way, rather than privately disclosed to particular individuals or entities.

Cook’s email revealed that the growth in iPhone activations “has actually accelerated over the past few weeks, and we have had the best performance of the year for the App Store in China during the last 2 weeks” – information that Apple had not previously disclosed … 

“The SEC will undoubtedly want to take a look at this,” said Thomas Gorman, a partner at the law firm Dorsey & Whitney who defends companies and individuals facing SEC and other regulatory investigations. At the very least, the SEC will contact Apple to seek context for the disclosure, he said.

Bill Singer, another lawyer and owner of the BrokeAndBroker.com industry blog, agreed.

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, and Apple also declined comment aside from confirming to MarketWatch that Cook sent the email.

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  1. This is one of the stupidest things I have ever heard.

    • chrisl84 - 7 years ago

      You believe publicly traded companies should provide insider information to Cramer? I guess he has a pretty sweet gig then

      • I wonder to what degree the question hinges on whether the person receiving the information is a journalist. If Tim Cook has a conversation with a reporter about Apple sales, the reporter could, in theory, use this information to make insider trades. But if Cook believed that conversation was in the context of disclosing information to the public through the journalist, then can he still be considered to be passing inside information?

        Overall, I am skeptical of the source of this report–a lawyer who represents people accused of insider trading. It seems like he may be using this story as a means of free publicity.

      • rogifan - 7 years ago

        What insider information did Cook provide?

      • chrisl84 - 7 years ago

        “I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August. Growth in iPhone activations has actually accelerated over the past few weeks, and we have had the best performance of the year for the App Store in China during the last 2 weeks”

        This is clearly stating current information is positive up to THIS WEEK. That is not public disclosed.

      • chrisl84 - 7 years ago

        I await your response…..

      • He was providing it to a journalist who would disseminate it to the public, dippy.

      • chrisl84 - 7 years ago

        Cramer a journalist? LOL, thats funny. That makes Cramer an arm of Apple. Tim Cooks responsibility is to distribute it to ALL outlets.

      • Matt (@apple4ever) - 7 years ago

        Why not? Who cares. Freedom of speech man!

  2. chrisl84 - 7 years ago

    I was wondering about this when the news of the letter was making its rounds….at the very least the letter stunk of amateur hour, “please dont break up with me”

    • rogifan - 7 years ago

      Since when is responding to someone’s email considered a letter? Oh and 9to5Mac is a day late on this story.

    • You’re a dippy.

      • chrisl84 - 7 years ago

        You’re a fan boy who doesn’t under stand how the world works….dippy

    • nelson1112233 - 7 years ago

      Why is this chrisl84 spilling hate on every single article?

      If 84 in your name means the year 1984, you are too old for this. Or does it come from the book, and you just want Google to be our Big Brother, and Apple has to be removed?

      • ericisking - 7 years ago

        So if a CEO provides information to a journalist, but the interview is not being aired live on TV – let’s say, an interview with the New York Times – that’s illegal, because the journalist could run out and take advantage of the information before publicising it? How did things work before Live TV? Before the advent of Live TV, was it permissible to CEOs to comment on anything? If the CEO of Google says “Android is doing great in China”, during an interview with the Washington Post, that’s illegal?

  3. The lawyers smell money…

    • flaviosuave - 7 years ago

      They smell publicity, anyway. No way that a competent partner would actually take up this case, since there’s nothing there.

  4. paulywalnuts23 - 7 years ago

    9to5 isn’t giving the full reason for why this could be and issue. Apparently Cramer manages a portfolio so he could benefit from it before it when live to the public. However, if this crap is a break in the rules then I don’t see how Cramer can host a show seeing how he could influence people to buy stocks that would be beneficial himself as well. But hey everyone knows where the money is so it is time to go and pillage all you can.

    • rogifan - 7 years ago

      Cramer has a charitable trust. That’s it.

    • flaviosuave - 7 years ago

      It would only be a problem if Cramer made any trades on Apple between receiving the email and disseminating it publicly, and I would assume he’s smart enough to avoid that having been around in the financial news media for decades.

  5. kpom1 - 7 years ago

    I think Reg FD is somewhat more relaxed for press statements, though companies often file them on 8-K anyway.

    • flaviosuave - 7 years ago

      You are correct, SEC Regulation FD covering disclosures of material nonpublic information does not apply to disclosures to members of the press or other media. Companies can and should still be cautious of such disclosure, and can secure themselves by filing an 8-K, but it’s not required under current law.

  6. lkrupp215 - 7 years ago

    Are all you Cook haters getting butterflies in your stomachs yet? Is the prospect of Tim Cook being sanctioned by the SEC arousing certain feelings in your groin area? Just asking.

    • chrisl84 - 7 years ago

      Why do you excuse illegal activity? Is it possible to like Apple and expect better from them without being a hater? Just asking. 9to5 readers are the most Apple Zombie crowd there is. Question anything Apple does and you are a HATER

      • rogifan - 7 years ago

        Illegal activity? According to who? So far the SEC has not commented and there is zero indication they will do anything.

      • chrisl84 - 7 years ago

        Still no response about the insider information facts I dropped on you…..lol, still crickets chirping away.

      • flaviosuave - 7 years ago

        There’s no illegal activity, dipshit. These attorneys are just trying to garner publicity. SEC Regulation FD covering disclosures of material nonpublic information does not apply to disclosures to members of the press or other media.

        Is it possible to do your research before spouting nonsense? You’re just as blind and pathetic of an Apple/Cook hater as you accuse the readership here of being blind Apple lovers.

  7. Robert Dupuy - 7 years ago

    Steve Jobs you are missed.

    I miss the CEO that wanted to invent whole industries, and figured that’d be worth something to Wall Street, not the CEO that creates value to Wall Street with dividends and slavishly following Wall Street ups and downs on a daily basis.

    We need a technologist, not Cook.

    • bellevueboy - 7 years ago

      Yes you are so right. Let’s just ask God or whoever is the creator you believe in to send jobs back. Better yet not take him away next time. Jobs is gone and that’s the reality, is apple doing ok? Absolutely! Will it continue that way? Who knows? Would it have been different is jobs was here? Sure! Would that different have been better? Who knows? Cook has done more than a decent job to run a company of the scale of apple especially when a company that is synonymous with its founder. Yes let’s bring jobs back because WE think he might give us what we think he might give us.

    • rahhbriley - 7 years ago

      You have such trust in Jobs’ vision and decision making. Not saying it’s misplaced. But now carry your trust on a bit further…Tim Cook was Jobs’ absolute, unequivocal choice as successor. He’s doing great things that Jobs could never have done and he can never do the same things Jobs did. They have different talents. One of Tim’s is bringing talented people together and making great efficiencies. Tim enabled Steve to make great things. Without Tim’s supply chain, logistics and finance vision, Apple very well could not have been around long enough to have produced iPhone, etc.

  8. Gregory Wright - 7 years ago

    No one gained an advantage here and more importantly, there was no intent to give anyone an advantage.

  9. joe smith (@joe815smith) - 7 years ago

    I hate to say it but Tim is going to get spanked by the SEC. This was a dumb move by him.

    • proudappleuser - 7 years ago

      How so, Joe? Please share your legal or professional expertise on the matter. I’m a layman so I rely on the experts like yourself.

  10. Yves Crevecoeur - 7 years ago

    It is perfectly legal to provide such comments to a journalist.
    No numbers were provided and frankly it did not have much of an effect on the shares.
    Selling Apple in 90s made no sense at all, so the funds scooped up some shares cheap and the calmer heads prevailed.

  11. Joe Belkin - 7 years ago

    Cramer is “journalist” – expectation is email will be shared. Plus, Cook may have halted giant sell off – saving us a few hundred billion.

  12. Paul Andrew Dixon - 7 years ago

    oh america — what is wrong with you?

  13. moartheta - 7 years ago

    It is only illegal if a trade occurs based on the material nonpublic information. Since it was aired on CNBC that constitutes public dissemination. And these people went to law school.

  14. dwisehart - 7 years ago

    It is interesting to me, especially if Jim Cramer did not trade his own account based on this information, that the only people who might have benefitted from the information are the trading public who watch Jim Cramer’s show. Is the SEC going to go after the people who watched the show and then traded Apple stock? The SEC rule https://www.sec.gov/rules/final/33-7881.htm says that:

    “…the selective disclosure by issuers of material nonpublic information; when insider trading liability arises in connection with a trader’s “use” or “knowing possession” of material nonpublic information; and when the breach of a family or other non-business relationship may give rise to liability under the misappropriation theory of insider trading.”

    Which is about trading on that information, not about making an accidental selective disclosure.

    As for Cook’s actions, the rule says:

    “The timing of the required public disclosure depends on whether the selective disclosure was intentional or non-intentional; for an intentional selective disclosure, the issuer must make public disclosure simultaneously; for a non-intentional disclosure, the issuer must make public disclosure promptly. Under the regulation, the required public disclosure may be made by filing or furnishing a Form 8-K, or by another method or combination of methods that is reasonably designed to effect broad, non-exclusionary distribution of the information to the public.”


Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!

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