Apple

Apple to face proposed class-action lawsuit by shareholders

Last updated:

Apple has been ordered to face a proposed class-action lawsuit by shareholders who accused Chief Executive Tim Cook of concealing falling demand for iPhones in China, resulting in billions of dollars of investor losses.

In a decision on Wednesday, U.S. District Judge Yvonne Gonzalez Rogers said shareholders led by a UK pension fund can sue over Cook’s comment on a Nov. 1, 2018, analyst call that while Apple was facing sales pressure in some emerging markets, “I would not put China in that category.”

Apple told suppliers to curb production a few days after Cook spoke, and on Jan. 2, 2019, unexpectedly cut its quarterly revenue forecast by up to $9 billion, which Cook blamed in part on pressure on China’s economy from U.S.-China trade tensions.

The lowered revenue forecast was the first by Apple since the iPhone’s launch in 2007. Shares of Apple fell 10% the next day, erasing $74 billion of market value.

Apple and Cook have said there was no proof they defrauded or intended to defraud the plaintiffs. The company did not immediately respond on Thursday to requests for comment.

In a 23-page decision, Rogers said shareholders plausibly alleged that Cook’s statements on the analyst call about China were materially false and misleading.

She said that while Cook might not have known specifics about “troubling signs” in China that the company had begun seeing, it “strains credulity” he would have been in the dark about the trade tensions and their possible impact on Apple.

The plaintiffs raised a “strong inference” that Cook knew about the risks when discussing China on the analyst call, and a “cogent and compelling inference that Cook did not act innocently or with mere negligence,” Rogers wrote.

Rogers also dismissed claims related to demand for the iPhone XS and XS Max.

The plaintiffs are led by the Norfolk County Council as Administering Authority of the Norfolk Pension Fund, located in Norwich, England.

My Cart Close (×)

Your cart is empty
Browse Shop

Rapid Mobile

Rapid Mobile uses cookies, tokens, and other third party scripts to recognise visitors of our sites and services, remember your settings and privacy choices, and - depending on your settings and privacy choices - enable us and some key partners to collect information about you so that we can improve our services and deliver relevant ads.

 

By continuing to use our site or clicking I Accept, you agree that Rapid Mobile and our key partners may collect data and use cookies for personalised ads and other purposes, as described more fully in our privacy policy.

 

You can change your settings at any time by clicking Manage Settings or by visiting our Privacy Centre for more detailed information.

 

Privacy Settings saved!
Cookie Services

We need your consent so that we and our trusted partners can store and access cookies, unique identifiers, personal data and information about your browsing behaviour on your device. This enables us to serve relevant content and advertising to you, and to improve the service that we provide to our readers. This only applies to rapidmobile.biz.Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

These cookies allow us to count visits and traffic sources, so we can measure and improve the performance of our site.

We track anonymized user information to improve our website.
  • _ga
  • _gid
  • _gat

Save my preferences