A U.S. judge has rejected Apple’s bid to toss a class-action lawsuit that accuses CEO Tim Cook of defrauding shareholders by concealing falling demand for iPhones in China.
U.S. District Judge Yvonne Gonzalez Rogers’ decision late Monday night clears the way for shareholders led by a British pension fund to sue over a one-day plunge that wiped out $74 billion of Apple’s market value.
The lawsuit stemmed from Cook’s comment on a Nov. 1, 2018, analyst call that while Apple faced sales pressure in markets such as Brazil, India, Russia and Turkey, where currencies had weakened, “I would not put China in that category.”
Apple told suppliers a few days later to curb production, and on Jan. 2, 2019, unexpectedly slashed its quarterly revenue forecast by up to $9 billion, blaming U.S.-China trade tensions.
The lowered revenue forecast was Apple’s first since the iPhone’s launch in 2007, and the Cupertino, California-based company’s shares fell 10% the next day.
Rogers, based in Oakland, California, said jurors could reasonably infer that Cook was discussing Apple’s sales outlook in China, not past performance or the impact of currency changes… fall. “A reasonable jury could find that failure to disclose these risks caused plaintiff’s harm,” Rogers wrote.
MacDailyNews Note: The case is 19-2033 – IN RE APPLE INC. SECURITIES LITIGATION, United States District Court Northern District of California, 9th Circuit.
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