Steve Jobs' medical condition turned out to be more serious than Apple Inc. officials had previously acknowledged -- and that has analysts and legal experts questioning whether the company ran afoul of federal securities rules.
Apple had disclosed in early January that Jobs had a "hormone imbalance" and would take a leave of absence, but never said he was so sick that he needed a liver transplant.
Companies are not required to divulge medical details about executives, lawyers said. But they are required to disclose "material" information, which is defined as what a reasonable investor would need to know to make an informed decision on buying or selling stock.
"If they tried to lessen the disclosure and make it misleading by omission, that's just as bad as telling something that flat isn't true," said Jeffrey C. Soza, a securities lawyer at Glaser, Weil, Fink, Jacobs, Howard & Shapiro in Los Angeles.
The Tennessee doctor who led the transplant team said this week that Jobs was "the sickest patient on the waiting list" at the time a donor liver became available.
Dr. James D. Eason said that Apple's key man had tested high -- more likely to die from the condition -- on an index that rates patients with end-stage liver disease.
But all that investors or the public knew came from two brief statements on Apple's website. The first, about the hormone imbalance, was followed a week later by one from Jobs saying his health issue was "more complex" and would require a six-month leave.
The Cupertino, Calif., company has maintained that the initial statement was enough to satisfy disclosure rules imposed on publicly traded companies. But some analysts aren't so sure. Intentionally downplaying the extent of such an illness could set Apple on the wrong side of securities laws, Soza said.
Investor Warren E. Buffett agreed that Apple had been less than forthright. "Certainly Steve Jobs is important to Apple," he said in a CNBC-TV interview Wednesday. "Whether he is facing serious surgery or not is a material fact."
The state of Jobs' health has long been a subject of popular discussion, including his surgery for pancreatic cancer in 2004 and his widely observed weight loss that preceded his leave of absence. With that information in the public sphere, some experts say Apple fulfilled its legal obligation by saying that Jobs was on medical leave.
"His health is a matter of private information, which the board may be in possession of but has no affirmative obligation to disclose," said G. William Speer, a lawyer at Bryan Cave in Atlanta.
Jobs, who founded Apple in 1979, is widely considered a visionary whose products have repeatedly allowed the company to reinvent itself and stay ahead of the competition. His importance to the company fuels the debates on how much information about his health is material for investors.
"Steve is Apple," said Danielle Levitas, an analyst for industry research firm IDC. "The company was on the skids, and he came back to revive them. No doubt, if he were gone, it would be a different company. There aren't a whole lot of people out there like Steve Jobs."
Nor are there many companies whose fate seems so closely tied to that of a single person, said Stephen Davis, a corporate governance expert at Yale University's Millstein Center for Corporate Governance and Performance.
"Whether he's able to come back, in what capacity and when are all highly relevant to Apple's owners," Davis said. "We're in the middle of huge financial crisis that's been caused in part by huge failures of corporate governance. This is an age when you would hope corporations would get that shareholders need some pretty high-quality disclosure."
The Securities and Exchange Commission declined to comment on the situation.
The revelation of Jobs' illness riled critics because it comes on the heels of long-standing displeasure with Apple's secretive culture and what detractors say is its grudging disclosure of important issues.
"Across the board the company is tight-lipped and tends to hold information close to its vest," said Patrick McGurn, special counsel at RiskMetrics Group, a New York advisor to large investors on governance issues. "This isn't an isolated issue with Apple. It's a major concern at this point."
Apple agrees with Speer's view that Jobs' health is a private matter, and it has said almost nothing about it even after news of the liver transplant.
"Steve continues to look forward to returning to Apple at the end of June," reiterated Apple spokesman Steve Dowling.
He noted that the Tennessee doctors were "authorized" to release their statement late Tuesday about Jobs' condition, but declined to comment on whether Apple should have said more to investors.
Dowling also said none of the eight members of the board of directors would be available to comment. Former Vice President Al Gore and current and former chief executives of Google Inc., Genentech Inc. and Intuit Inc. declined to comment. Three other directors did not return calls.
Staff writer Alex Pham contributed to this report.