Software updates as SEC violations

Could disclosures on software updates be a securities violation? From Matt Levine in Bloomberg:

The U.S. Department of Justice and the Securities and Exchange Commission are investigating whether Apple Inc. violated securities laws concerning its disclosures about a software update that slowed older iPhone models, according to people familiar with the matter.

The government has requested information from the company, according to the people, who asked not to be named because the probe is private. The inquiry is in early stages, they cautioned, and it’s too soon to conclude any enforcement will follow. Investigators are looking into public statements made by Apple on the situation, they added.

While the slowdown has frustrated consumers, U.S. investigators are concerned that the company may have misled investors about the performance of older phones.

It is fun to imagine more extreme hypotheticals. What if Apple sold phones that it knew would explode after one year, and they all exploded and killed millions of people? And the Justice Department looked into it, examined the facts and the law, and said: “You know, this looks like securities fraud. The real victims here are Apple’s shareholders, who had no warning that the phones would explode and kill their users, and who have now lost money when the stock dropped.” If you were an alien trying to understand the U.S. legal system from cases like this one (also opioid casesclimate-change lawsuitsgun control, etc.), you might conclude that its purpose is to protect shareholders from losing money when the companies they own harm consumers. 

via Sergeant Spoof’s Time Has Passed at Bloomberg.com