Tim Cook, CEO, Apple deceived the shareholders about the declining demand of iPhones in China. Consequently, the company has agreed to settle a class action suit of $490 million.
The settlement which was filed at the U.S. District Court in Oakland, California was the the first stage. However, it is waiting for approval by the U.S District Judge Yvonne Gonzalez.
All this started from when Apple made the the shocking announcement earlier in the year about its not reaching its predicted quarterly revenue, as it balmed the U.S trade tensions.
Recall in 2017 when cook told investors about the pressure the company is facing in countries where their currencies are floating. He excluded China from these countries he mentioned; Brazil, India, Russia and Turkey.
The 2017 revenue was the lowest Apple recorded since its launch in 2007. Apple lost $74 billion of its market value the day after its shares fell by 10%.
There was slow in response from Apple and its lawyers regarding the ruling as its initially denied the liability but still agreed to clear the cost of the legal action
Partner at Robbins Geller Rudman & Dowd and the representative of the shareholders, Shawn Williams reacted to the settlement as outstanding for the class. Investors who bought Apple shares within the timeframe if Cook’s comment and the revenue prediction are all covered by the settlement
Apple released its net income for its current fiscal year and it showed that the company was doing well with the financials
Last June, Rogers refused to dismiss the lawsuit. Chief Judge Rodgers declined to clear out the lawsuit last year in June. She reasonably believed that Cook had been focusing on the company sales forecast rather than the issues of weakening currencies.
In addition, she said Apple obviously knew China’s economy could become volatile and that could affect demand
The company market value has risen to over $2.6 trillion since 2019 January, as its share price has been multiplied in 4 folds since then
In re Apple Inc Securities Litigation is the name of the case that is filed, at U.S. District Court, Northern District of California, No. 19-02033
