Is Apple Committing Section 18 Violations?

Look over here, no look over here!

The SEC has guidelines to provide protections for investors, particularly those that are not professionals or well informed, to ensure that management teams do not make false or misleading claims or statements. For example, the SEC has finally begun to crack down on the SPAC craze where management teams made outrageous projections for years down the road without any basis other than “hope” in the effort to sell securities. Few would disagree that security sales were made by some SPAC’s based on flimsy, baseless projections are a violation of Section 18 of the Exchange Act:

Liability for False and Misleading Statements – Section 18 of the Exchange Act imposes liability for false and misleading statements in documents filed with the SEC to any person who makes such false or misleading statements, subject to applicable defenses.

What about public companies that merely put “lipstick on a pig” when reviewing financial results and providing forward projections? Less clear I guess, especially if you are one of the largest public companies in the world, Apple. Few employees working at the SEC aren’t carrying I-Phones with them to-and-fro home to office, so why risk upsetting the Apple cart! Well, the earnings report and ensuing conference call with analysts on Thursday February 1st, 2024 has to represent either a minor or a major violation of Section 18 committed by Tim Cook and especially CFO Luca Maestri. You decide.