If a key executive falls ill, how much should the company disclose to the public and investors?

Apple Inc. faced that question again recently, revealing that iconic CEO Steve Jobs would be taking another medical leave for undisclosed reasons.

While a more candid disclosure of Mr. Jobs' leave may have calmed jittery stockholders whose brief sell-off temporarily depressed Apple's share price, the company did all that is required of it to meet securities laws and avoid liability, legal experts say.

A shareholder suit is highly unlikely to be triggered unless there is a sizable loss or there are violations of Securities & Exchange Commission regulations, neither of which occurred, legal experts say.

Apple's stock price fluctuated last week. The stock had closed at an all-time high of $348.46 on Jan. 14, but slumped 5% after Mr. Jobs announced his leave, closing at $333.87 on Jan. 18. But Apple's share price bounced back Jan. 19 after the company reported a 78% surge in quarterly profits and issued a strong forecast going forward. By early afternoon trading, Apple shares were up to $342.85, restoring most of the prior day's loss. However, Apple's stock closed Friday at $326.72 per share.

Under SEC rules, only “material information” that “would influence an investor's decision to buy or sell securities” is required to be disclosed to shareholders, and CEO health is not among the examples provided in the SEC's definition of “material.” In fact, the SEC has a “Compliance and Disclosure Interpretation” that says even the death of a director is not a triggering event requiring the filing of a Form 8-K.

And while the SEC requires a publicly traded company to file a Form 8-K when a principal financial officer temporarily turns over his or her duties to another person, no interim CEO was named in Apple's case, though Mr. Jobs said Chief Operating Officer Tim Cook will be responsible for Apple's day-to-day operations.

In a statement released by Apple on Jan. 17, Mr. Jobs said he was taking a medical leave to focus on his health. He said he will continue as CEO and be involved in major strategic decisions for the company. No date was given for when Mr. Jobs will return to his post, and he did not elaborate on his health condition except to say “I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect of our privacy.”

Mr. Jobs, who co-founded Apple in 1976, has taken two previous medical leaves—one for cancer surgery in 2004 and another for a liver transplant in 2009.

Peter Henning, a law professor at Wayne State University Law School in Detroit, said: “I understand investors want more information. I've never heard investors say, "Tell us less.' They are voracious. But there's no obligation under the law to tell investors every piece of material information a company might have until it's required to do so. I think they did enough, if that's all they know at this point. No health issue is crystal-clear.”

However, “I do have a problem with how Apple handled it last time. What they did differently this time is, they've controlled the disclosure. You can't deny, deny, deny and then turn 180 degrees and say, "Yes.' Here they said he's sick and on a leave. I don't know what more they can be required to disclose. He hasn't resigned. They don't have to tell you everything about their future plans. There's no obligation to do that.”

Apple could not be reached for comment.

Two other recent CEO illnesses prompted a similar debate.

Sara Lee CEO Brenda Barnes stepped down from the company in August after revealing she had suffered a stroke in May. The company previously had announced that she was on a leave of absence, providing few details.

By contrast, when American International Group Inc. CEO Robert Benmosche was diagnosed with cancer in October, he was more forthcoming, announcing a succession plan in the event that he would become unable to effectively serve in his current role. Mr. Benmosche has not disclosed what type of cancer he has.

No securities suits were filed in either case.

There are two scenarios that might give rise to shareholder litigation in such cases, said Dan A. Bailey, a partner at Bailey Cavalieri L.L.C. in Columbus, Ohio.

Shareholders could assert that the announcement of a CEO's illness came at the end of a period of misrepresentation, arguing that the company had hid the truth about the CEO's condition for a long time. But to prevail in that type of claim, plaintiffs would have to prove that the company had a duty to disclose this new health information sooner and that the information was material, which would be difficult, Mr. Bailey said.

But in the case of Mr. Jobs, his prior health issues eventually came to light during his prior two leaves, said Ann Longmore, New York-based executive vp and D&O product leader with the executive risk practice at Willis North America.

“Here being the second time he's gone out on medical leave, and knowing the surrounding circumstances on his health, the reasonable person realizes” that this leave most likely is related.

“There was more uncertainty last time,” she said. “Now we know more about his medical problems. You can read between the lines.”

Mr. Bailey outlined a possible second scenario that might give rise to shareholder litigation.

“Say the CEO dies in a week or a month. The plaintiffs could come and say they should have disclosed more” prior to the leave. “They might say, "if you had told us the full impact, the stock might have dropped further, but by delaying the news, it artificially inflated the stock price,'” he said.

But “either scenario would be contingent on whether the stock price drops precipitously. You've got to have a drop in stock price after the corrective disclosure,” he said.

Kevin M. LaCroix, executive vp at OakBridge Insurance Services, a wholesale brokerage in Bloomfield, Conn., that specializes in executive liability, said “it would be very difficult for a claimant to even think about filing a lawsuit” because “they would have to show that there was loss causation attributable to the "material' disclosure requirement” and an “intent to deceive.”

“The problem is, it is very hard to have a bright line test of what is materiality,” said Mr. LaCroix, who also is a lawyer. “What makes something material?”

“Then there's always the issue of privacy. I don't know how that intersects with disclosure requirements. When has it reached the point where there needs to be a disclosure?” Mr. LaCroix asked.

Securities law experts maintain that even a high-profile CEO like Mr. Jobs has a right to privacy. The Health Insurance Portability and Accountability Act, which regulates the use and disclosure of personal medical information by health care providers and health insurers, has no separate rules for information about elected officials, public figures or celebrities.

“Individuals should be entitled to keep their health information somewhat private, even if you are a CEO or a public figure,” said Mr. Bailey.