GUIdebook: Graphical User Interface galleryHome > Articles > “Apple, early officers face trial over Twiggy”
Go backArticlesApple, early officers face trial over Twiggy

Reprinted from MacWEEK, 3 October 1989. Courtesy John Woodall.

San Francisco – A jury must decide whether Apple’s “unqualified optimism” about its failed Twiggy disk drive deceived investors in the early 1980s, but similar Apple exuberance about the ill-fated Lisa computer was not legally misleading, a federal appeals court ruled last week.

The ruling, by the 9th U.S. Circuit Court of Appeals here, came in a shareholders’ suit filed after Apple’s stock plunged 75 percent in 1983 as a result of the product’s failure. The court upheld a 1987 ruling by U.S. District Judge Robert Aguilar that extensive press coverage portraying the Lisa as a gamble balanced Apple’s upbeat statements about the machine, which was the Mac’s pioneering but unsuccessful predecessor.

Overturning another aspect of Aguilar’s earlier ruling, however, the appeals court said Apple and its top officers in 1982 – including John Sculley, Steve Jobs, Mike Markkula and Delbert Yocam, among others – should face jury trial to determine whether “Apple’s failure to disclose Twiggy’s technical problems had no misleading effect on market price.”

Twiggy was a proprietary high-density double-sided 5.25-inch floppy drive intended to work with the Lisa and other Apple computers. Shortly after unveiling the Lisa, Apple replaced Twiggy with another drive technology.

While the company was proclaiming Twiggy’s superiority, “internal tests conducted by Apple indicated slowness and unreliability in Twiggy’s information-processing capabilities,” the appeals court said.

Apple spokeswoman Carleen LeVasseur hailed the decision as reaffirming “our position that Apple acted properly at all times and did not violate securities laws.

“We continue to be confident that the remaining issues in the case will be resolved in our favor,” she said.

by Carolyn Said

Page added on 22nd January 2005.

Copyright © 2002-2006 Marcin Wichary, unless stated otherwise.