A judge is allowing a lawsuit from AAPL investors who claim that CEO Tim Cook made statements that ‘were materially false and misleading,’ resulting in them losing billions of dollars.
The lawsuit has been brought by a UK pension fund which was invested in the company …
The Norfolk Pension Fund is run by Norfolk County Council.
If losing money on AAPL investments seems kind of strange, it’s because the dispute dates back to November 2018. Reuters reports.
Apple Inc has been ordered to face a proposed class-action lawsuit by shareholders who accused Chief Executive Tim Cook of concealing falling demand for iPhones in China, resulting in billions of dollars of investor losses.
In a decision on Wednesday, U.S. District Judge Yvonne Gonzalez Rogers said shareholders led by a UK pension fund can sue over Cook’s comment on a Nov. 1, 2018, analyst call that while Apple was facing sales pressure in some emerging markets, “I would not put China in that category.”
Apple told suppliers to curb production a few days after Cook spoke, and on Jan. 2, 2019, unexpectedly cut its quarterly revenue forecast by up to $9 billion, which Cook blamed in part on pressure on China’s economy from U.S.-China trade tensions.
The lowered revenue forecast was the first by Cupertino, California-based Apple since the iPhone’s launch in 2007. Shares of Apple fell 10% the next day, erasing $74 billion of market value.
U.S. District Judge Yvonne Gonzalez Rogers said that the allegation was plausible, and the lawsuit should therefore be allowed to proceed.
She said that while Cook might not have known specifics about “troubling signs” in China that the company had begun seeing, it “strains credulity” he would have been in the dark about the trade tensions and their possible impact on Apple.
The plaintiffs raised a “strong inference” that Cook knew about the risks when discussing China on the analyst call, and a “cogent and compelling inference that Cook did not act innocently or with mere negligence,” Rogers wrote.
Apple had not responded to a request for comment at the time of writing.
Photo: Ariel Zambelich/NPR