Published , by TJ Denzer
Published , by TJ Denzer
This week, Apple has settled a class-action lawsuit to the tune of $490 million USD over allegations of defrauding investors. The lawsuit alleged that Tim Cook intentionally aimed to hide poor sales performance and demand of iPhone products in China when speaking to investors in 2018. Plaintiffs claimed that Cook’s comments alongside Apple supply reductions immediately following directly contributed to a fall in share price.
The settlement of this lawsuit was reported this week in a preliminary filing with the U.S. District Court in Oakland, California. It will require approval by presiding U.S. District Judge Yvonne Gonzalez Rogers, as reported by CNBC. The core complaint of the lawsuit is that Cook reportedly told investors in an analyst call on November 1, 2018, that while Apple was facing difficulties in Brazil, India, Russia, and Turkey markets, “I would not put China in that category.” Soon after, Apple told its suppliers to lower production and the lawsuit alleges that this directly contributed to lowered share price amounting to $74 billion wiped off the market.
In the settlement, Apple went on to deny liability for the allegations of the lawsuit, but wanted to settle the suit to avoid costly litigation and distractions. Apple had actually called for a dismissal of the lawsuit in June 2023, but Judge Rogers refused. She found that it was plausible that Apple and Cook knew about China’s slowing economy and demand at the time of the inciting investor call.
Shawn Williams, a lawyer for the shareholders, called the settlement an “outstanding result” for the class, which includes shareholders who bought Apple shares in the two months between Cook’s comments and the revenue forecast.
Having presided over lawsuits regarding Apple in the past, it will remain to be seen if Judge Rogers allows the settlement. Stay tuned for more news and updates on Apple.