MoneyWatch Tech

SEC Investigating Apple Share Trading?

By Erik Sherman

Updated on: August 31, 2009 / 8:10 PM EDT / MoneyWatch

Apple may have surpassed Google for the near-a-new-regulatory-investigation-every-moment award. According to a HuffPo piece written by Dan Dorfman, the Securities and Exchange Commission is investigating four separate periods of trading in Apple shares.

According to Dorfman, who says a contact sent him a copy of the internal SEC documents, speculation among Wall Street experts is that the focal point of the investigation is several different areas where traders seemed to have had insider information.

Judging from "some uncanny trading" that he saw taking place in Apple, one hedge fund trader told me "it almost looked at times like the buyers and sellers were working at the company."

It's worth clicking the link and reading this piece. Apple isn't saying anything, of course, and neither is the SEC ... of course. But if it's true, and seeing copies of internal SEC documents is a pretty good form of rumor, this is potential disaster for Apple for the following reasons:

SEC investigations are serious things and distracting for management.
If true, it's the sort of thing that makes the SEC think, "Let's set an example here."
Whether true or not, this could end up seriously hurting the stock price, which could then affect many other things. Investors don't like to think that they're being played for fools.

There's no big damage at the moment; Apple shares were down just over 1 percent at the close of business today. But there have been plenty of tech high fliers in the past that were quickly brought down to reality by regulators. If -- and this is the big question -- there was something untoward going on and if there was knowledge at a high level of Apple management, then it might be time for a number of people at the top to leave the company.

Image via stock.xchng user ev1, site standard license.