Apple CEO Tim Cook speaks at Apple’s Worldwide Developers Conference at Apple Park in Cupertino, California, on Monday, June 6, 2022.
David Paul Morris | David Paul Morris Bloomberg | Getty Images
apple A $490 million settlement has been reached to resolve a class-action lawsuit accusing CEO Cook of deceiving shareholders by concealing falling iPhone demand in China.
The preliminary settlement agreement was filed Friday in U.S. District Court in Oakland, Calif., and requires approval by U.S. District Judge Yvonne Gonzalez Rogers.
It stems from Apple’s surprise announcement on January 2, 2019 that the iPhone maker would cut its quarterly revenue forecast by up to $9 billion due to Sino-US trade tensions.
Cook told investors on a Nov. 1, 2018 conference call that while Apple faces sales pressure in markets with weak currencies, such as Brazil, India, Russia and Turkey, “I wouldn’t put China in that category.” .”
A few days later, Apple notified suppliers to limit production.
This is the first time Apple has lowered its revenue forecast since launching the iPhone in 2007. The next day, Apple’s stock price fell 10%, and its market value evaporated by $74 billion.
Apple and its lawyers did not immediately respond to requests for comment on the ruling.
The Cupertino, California-based company denied liability but reached a settlement to avoid the cost and disruption of litigation, court documents show.
Shawn Williams, an attorney for the shareholders, called the settlement an “outstanding outcome” for the class, which includes shareholders who bought Apple stock in the two months between Cook’s comments and the revenue forecast.
Apple reported a net profit of $97 billion in its most recent fiscal year, spending the equivalent of less than two days of profit.
Last June, Rogers refused to dismiss the lawsuit.
She believes it’s reasonable that Cook has been discussing Apple’s sales prospects rather than currency changes, and said Apple knows China’s economy is slowing and demand could fall.
The lead plaintiff is Norfolk County Council in Norwich, England, as the governing body of the Norfolk Pension Fund.
Shareholder attorneys may seek fees of up to 25% of the settlement amount.
Apple’s stock price has more than quadrupled since January 2019, giving the company a market value of more than $2.6 trillion.
The case is an Apple Securities Litigation, U.S. District Court for the Northern District of California, No. 19-02033.
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