Apple must face U.S. shareholder lawsuit over CEO’s iPhone, China comments

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

A federal judge said Apple Inc must face part of a lawsuit claiming it fraudulently concealed falling demand for iPhones, especially in China, leading to tens of billions of dollars in shareholder losses.

While dismissing most claims, U.S. District Judge Yvonne Gonzalez Rogers ruled late Tuesday that shareholders can sue over Chief Executive Tim Cook’s comments touting strong iPhone demand on a Nov. 1, 2018 analyst call, only a few days before Apple told its largest manufacturers to curb production.

“Absent some natural disaster or other intervening reason, it is simply implausible that Cook would not have known that iPhone demand in China was falling mere days before cutting production lines,” Rogers wrote.

The Oakland, California-based judge also said a decision by Apple to stop reporting iPhone unit sales “plausibly suggests that defendants expected unit sales to decline.”

Apple did not immediately respond on Wednesday to requests for comment.

The complaint, led by the Employees’ Retirement System of the State of Rhode Island, came after Cook on Jan. 2, 2019 unexpectedly reduced Apple’s quarterly revenue forecast by up to $9 billion, in part because of U.S.-China trade tensions.

It was the first time since the iPhone’s 2007 launch that the Cupertino, California-based company had cut its revenue forecast. Apple stock fell 10% the next day, erasing $74 billion of market value.

Cook had said on the analyst call that the iPhone XS and XS Max had a “really great start,” and that while some emerging markets faced downward sales pressures “I would not put China in that category.”

By mid-November 2018, Apple had told the manufacturers Foxconn and Pagatron to halt plans for new iPhone production lines, and a key supplier had been told to materially reduce shipments, the complaint said.

The case is In re Apple Inc Securities Litigation, U.S. District Court, Northern District of California, No. 19-02033.

This article was originally posted on finance.yahoo.com/news/.

Home of Science
Follow me

- Advertisement -

Discover

Sponsor

Latest

The Papers: ‘Midsummer’s dream’ and ‘118 days until freedom’on February 23, 2021 at 6:02 am

Tuesday's front pages are dominated by the prime minister's plan to ease England's lockdown.The GMB union tells the Express it is "absolutely scandalous" that...

‘War on Terror’: Are big military deployments over?on June 19, 2021 at 11:45 pm

Twenty years on from the "War on Terror", is it the end of big military deployments to warzones?image copyrightGetty ImagesWestern forces are racing to...

‘I’ll buy five items and only keep one of them’on March 22, 2021 at 12:08 am

With online returns soaring during the pandemic, tech firms are helping retailers deal with the rise.He says that younger shoppers were already happy to...

Derek Chauvin conviction: ‘This is monumental. This is historic’on April 21, 2021 at 10:03 am

The conviction of the police officer for the death of George Floyd has been hailed as a watershed.image copyrightGetty ImagesThe conviction of a police...

The biggest oil ETF is down more than 30% this week, and retail investors are getting ‘hosed’

The gyrations that have gripped financial markets for the past several weeks just caught up with the oil sector, taking many investors along for...
Home of Science
Follow me