Apple has agreed to pay a $490 million to settle a class action lawsuit over CEO Tim Cook's alleged concealment of an iPhone sales slump in China, reports Reuters.
The settlement agreement was filed today with the U.S. District Court in Oakland, California, but it still requires approval from U.S. District Judge Yvonne Gonzalez Rogers.
The lawsuit was initiated after Apple unexpectedly announced on January 2, 2019 that it would slash quarterly revenue by up to $9 billion due to U.S.-China trade tensions.
The announcement followed an earnings call on November 1, 2018 where Cook told investors that he would not put China in the same category as markets like Brazil, India, Russia, and Turkey, where the company was facing sales pressure. A few days later, Apple told suppliers to curb production.
Apple's lowered revenue forecast caused shares of the company to drop 10% the next day, erasing $74 billion in market value.
While Apple has denied liability, Judge Rogers refused to dismiss the case, finding it plausible that Cook had been discussing Apple's sales outlook rather than currency changes. She also said Apple knew China's economy was slowing and demand could fall.
Shawn Williams, a partner at Robbins Geller Rudman & Dowd representing the shareholders, described the settlement an "outstanding result." The settlement will cover investors who bought shares of AAPL in the two months between Cook's comments and the revenue forecast.
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The settlement agreement was filed today with the U.S. District Court in Oakland, California, but it still requires approval from U.S. District Judge Yvonne Gonzalez Rogers.
The lawsuit was initiated after Apple unexpectedly announced on January 2, 2019 that it would slash quarterly revenue by up to $9 billion due to U.S.-China trade tensions.
The announcement followed an earnings call on November 1, 2018 where Cook told investors that he would not put China in the same category as markets like Brazil, India, Russia, and Turkey, where the company was facing sales pressure. A few days later, Apple told suppliers to curb production.
Apple's lowered revenue forecast caused shares of the company to drop 10% the next day, erasing $74 billion in market value.
While Apple has denied liability, Judge Rogers refused to dismiss the case, finding it plausible that Cook had been discussing Apple's sales outlook rather than currency changes. She also said Apple knew China's economy was slowing and demand could fall.
Shawn Williams, a partner at Robbins Geller Rudman & Dowd representing the shareholders, described the settlement an "outstanding result." The settlement will cover investors who bought shares of AAPL in the two months between Cook's comments and the revenue forecast.
Please download the iClarified app or follow iClarified on Twitter, Facebook, YouTube, and RSS for further updates.