After watching billions of dollars evaporate on news that Steve Jobs will take a medical leave of absence – just a week after the cancer survivor advised people to relax because his health problems were easily treated – some Apple shareholders likely are thinking about lawsuits.

Legal experts say the strength of those lawsuits would hinge on who at Apple knew what, and when.

Since last June, when an unusually thin Jobs addressed a gathering of software developers, rumours or disclosures about the charismatic CEO’s health have sent the stock surging or falling. On the December day after Apple disclosed Jobs would not appear at the Macworld trade show as he normally does, US$5.5 billion in shareholder wealth vanished.

Most of those losses were restored when Jobs said Jan. 5 that he had a treatable hormone imbalance. But then came Jobs’ announcement on Wednesday that his medical issues were “more complex” than he believed the previous week. Jobs, 53, said he was taking leave until the end of June – and nearly $10 billion in market value was wiped out.

The key question facing Apple’s legal team now will be whether Jobs’ and Apple’s disclosures revealed enough at each step.

“This is just the nightmare scenario” for Apple lawyers, said Sean O’Connor, an associate professor at the University of Washington School of Law.

The reason is that Cupertino, California-based Apple, like any publicly traded company, is required by law to disclose all sorts of details.

Much of that information is formulaic and issued regularly, like quarterly earnings and top executives’ salaries. But there’s also something of a wild card category, “material” information, which lumps together everything a reasonable investor would want to know because it could affect a decision to buy or sell a company’s stock. (There are exceptions, such as for trade secrets.)

Apple might have ignored the matter of Jobs’ health if rumours had been contained to a handful of bloggers in quiet corners of the web. It might have even continued to offer a “no comment,” citing privacy issues around an employee’s health, once it became a big story.

“It’s on the edge, but it would not be indefensible,” O’Connor said.

But Apple didn’t stay quiet once the story went mainstream. Jobs made a much-publicised off-the-record call to a New York Times columnist over the summer. And once Apple started talking, it had to become very careful about what it said, to avoid securities fraud.

If shareholders sue Apple, a court would consider three things. Did Apple, or Jobs, misrepresent his health? Did they omit crucial details? Did they fail to connect dots for investors, scattering evidence of a serious problem here and there?

Apple spokesman Steve Dowling would not comment beyond what Apple has already said in its statements about Jobs.

Larry Sucharow, chairman of the New York law firm Labaton Sucharow, which specialises in investor lawsuits, said it’s too early to tell whether Apple is in legal hot water.

There is no question, he said, that Jobs’ health, to the extent that it affects his ability to run Apple, is material, even if a less prominent CEO’s health wouldn’t be material. But the deciding factor will not be how much Apple’s stock moved on the news of the day. The risk of a chief executive falling ill is one of many investors must consider. At its core, this matter will be decided once it comes out who at Apple knew what about Jobs’ health – and when.

“A company and its spokespeople are always obligated, when they speak, to tell the complete truth. You can’t tell a half truth without telling the other half,” he said in an interview Thursday.

Sucharow was quick to say he had no reason to think Jobs was anything but truthful when he told the public last week of his hormonal imbalance.

“God forbid, if it turns out that there’s a recurrence of pancreatic cancer and that’s what’s causing the hormonal imbalance, but they chose to focus on the hormonal imbalance, then I believe that you will see shareholder lawsuits,” Sucharow said.

Laurence Rosen, managing partner of the Rosen Law Firm, another firm that represents investors in shareholder lawsuits, pointed out that Jobs may very well have gotten new medical information in the last week. Or he might simply feel differently, based on the same information.

“It’s, ‘Today I feel fine and I feel like I can beat this and stay at work,'” Rosen said. And if that feeling changes the next day, Rosen added, “That’s not fraud, right?”