updated 10:55 pm EDT, Thu October 23, 2008
Teen wrote fake story
The SEC has found the author of the false internet report suggesting that Steve Jobs had suffered a major heart attack, according to Bloomberg. The 18 year old, writing under the name "Johntw," posted the fabricated story on CNN's iReport website, a portal that posts entries from "citizen-journalists" that are not affiliates or staff writers of the news company. The report allegedly drove AAPL market value down $4.8 billion in the first hour of trading, even though it was quickly exposed as a fabrication and the stock recovered most of the lost value by the end of the day.
The fictitious story suggested that an anonymous insider provided information that Jobs was rushed to the hospital after the paramedics were called because he was suffering from "severe chest pains and shortness of breath." It also claimed that he ended up in an emergency room and suffered a major heart attack.
Steve Jobs health has been the focus of attention throughout the year, starting with the WWDC keynote address where he appeared unusually thin. He had undergone surgery four years ago to remedy a rare form of pancreatic cancer. This has lead some to believe that his sickly appearance means the condition has returned.
Jobs has denied the allegations, but claims his health is a "private matter." He reported to Apple's board that the thin appearance was the result of nutritional problems from the cancer treatment, but that the cancer itself had not returned.
Jobs can be considered the "face" of Apple, and his position there is considered by many to be essential to the strong growth that the company has experienced recently and that could continue into the future. Some speculators have remained unconvinced that his health is as good as claimed. The lack of any positive change in his appearance has been considered a factor in AAPL's low stock prices through the second half of the year.
Because of the known fluctuations of Apple stock price depending on public perception of the CEO's health, the SEC had been investigating the matter to determine if a rogue investor intentionally publicized the story to profit from short selling the stock. The government branch continually watches for similar activity, especially in sensitive market times when a rumor can result in multi-billion dollar sell-offs.
So far no evidence has been found that suggests the teen was trading Apple stock or options at the time. The individual is unlikely to face prosecution from the SEC unless they can prove his intentions were to drive the share price down, although he could still be charged by other government agencies for violation of other laws.