Apple Has Now Reached A $490 Million Settlement To Determine A Legal Claim Over..

Apple CEO, Tim Cook

Apple has reached a $490 million settlement to determine a legal claim that allegedly said CEO Tim Cook swindled investors by disguising falling demand for iPhones in China.

A preliminary settlement was filed on Friday with the U.S. District Court in Oakland, California, and requires approval by U.S. District Judge Yvonne Gonzalez Rogers.

It originated from Apple’s surprising announcement on January 2, 2019, that the iPhone maker would reduce its quarterly revenue forecast by up to $9 billion, accusing U.S.- China trade tension.

Tim Cook had told investors on a November 1, 2018, that in spite of the fact that Apple confronted sales tension in business sectors like Brazil, India, Russia and Turkey, where monetary standards had debilitated, “I would not put China in that category.”

However, Apple told suppliers a couple of days later to curb production.

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

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The Cupertino, California-based company denied liability, but settled to avoid the cost and distraction of litigation, court papers show.

Shawn Williams, a lawyer for the shareholders, called the settlement an “outstanding result” for the class, which includes shareholders who bought Apple shares in the two months between Cook’s comments and the revenue forecast.

Apple posted $97 billion of net gain in its most recent fiscal year, and its payout rises to a little under two days of profit. In June 2023, Rogers would not excuse the claim.

She found it plausible to believe Cook had been discussing Apple’s sales outlook and not currency changes, and said Apple knew China’s economy was slowing and demand could fall.

The lead plaintiff is the Norfolk County Council as Administering Authority of the Norfolk Pension Fund, located in Norwich, England.

Lawyers for the shareholders may seek fees of up to 25% of the settlement amount.

Apple’s share price has more than quadrupled since January 2019, giving the company a more than $2.6 trillion market value.

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

credit: CNBC

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