Class action settlement
Cook’s China statement costs Apple half a billion dollars
March 15, 2024, 7:44 p.m
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When the boss speaks, everyone listens – including investors at a meeting with Apple boss Tim Cook. He’s going too far out of the window with a statement about business in China. Investors feel deceived and succeed with a class action lawsuit.
Apple has reached a $490 million settlement in a class action lawsuit. Investors had alleged that the company concealed falling demand for the iPhone in China in 2018. The iPhone maker and the plaintiffs filed the settlement proposal in the U.S. District Court in Northern California. Judge Yvonne Gonzalez Rogers still has to approve it.
“I wouldn’t include China in this category,” CEO Tim Cook said in an analyst conference on November 1, 2018, after listing a number of countries with weak sales. On January 2, 2019, Apple lowered its sales forecast, citing the trade dispute between the USA and China. The share had lost ten percent of its value the following day.
Shareholders then filed a class action lawsuit in US District Court in Oakland. It accused Apple of violating federal securities laws by making false and misleading statements about the company’s performance in China.
Apple denied any wrongdoing in the settlement agreement and stressed that the agreement only avoided a lengthy and costly legal battle. Apple declined to comment further. Shawn Williams, an attorney for the plaintiffs, said the settlement is a great result for shareholders.
Apple earned $97 billion in its most recent fiscal year, which ended in September. That means the dollar amount of Friday’s settlement represents less than two days of the company’s annual profit.