Apple has agreed to pay $490 million to settle a class-action lawsuit alleging that company CEO Tim Cook defrauded shareholders by hiding a decline in demand for iPhones in China, writes Reuters.
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What is known
The preliminary agreement was filed in the US District Court in Oakland, California on March 15. It now requires approval from a district judge. The lead plaintiff is Norfolk County Council in England.
According to the lawsuit, Cook said on January 2, 2019 that the iPhone maker would cut its quarterly revenue forecast by up to $9 billion. He then blamed this on trade tensions between the United States and China. . At the same time, on November 1, 2018, the company’s CEO said that Apple faced problems with sales in markets in Brazil, India, Russia and Turkey, but “did not classify China in this category.” A few days later, Apple informed suppliers of the need to cut production, Reuters notes.
Robbins Geller Rudman & Dowd partner Sean Williams, who represents shareholders, called the decision an “outstanding result” for the group.
The agreement applies to investors who bought Apple shares during the two months between Cook's statements and the earnings forecast, the agency clarifies.