SEC probes whether Apple and other large caps use buybacks to hit EPS targets. Record $1.2 trillion in 2024 buybacks faces new scrutiny on timing and disclosure.
The SEC is asking large-cap companies for details on share buyback timing and disclosure, with a focus on whether executives use the programs to hit earnings-per-share targets. The enforcement division has sent information requests to several firms, according to people familiar with the matter.
Apple, which spent $23 billion on buybacks in the March quarter, is among the companies that received inquiries, one of the people said. Regulators are examining whether firms execute buybacks to offset dilution from stock-based compensation while signaling confidence to the market. They are also looking at whether companies disclose material nonpublic information before buyback windows open.
Buyback volumes hit a record $1.2 trillion in 2024. Critics say the programs inflate executive pay tied to per-share metrics. Defenders argue they return capital efficiently when companies lack better investment opportunities.
The SEC has not proposed new rules. The inquiries suggest a shift in enforcement posture. For investors, the risk is that buyback announcements lose their signaling power if regulators force more disclosure. Companies that rely heavily on buybacks to support share prices could face a recalibration of investor expectations.
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