Judge Orders Apple to Face U.S. Shareholder Lawsuit Over Tim Cook’s Comments
Apple has been ordered by U.S. District Judge Yvonne Gonzalez Rogers to face a lawsuit claiming it fraudulently concealed falling demand for iPhones, especially in China, which resulted in its shareholders losing billions of dollars, Reuters is reporting.
The Oakland, California-based federal judge ruled late Tuesday that shareholders can sue over CEO Tim Cook’s comments touting strong iPhone demand on a Nov. 1, 2018 analyst call, only a few days before Apple told its largest manufacturers to curb production.
The judge also said Apple’s decision to stop reporting iPhone unit sales “plausibly suggests that defendants expected unit sales to decline.”
“Absent some natural disaster or other intervening reason, it is simply implausible that Cook would not have known that iPhone demand in China was falling mere days before cutting production lines,” Rogers wrote.
The complaint, led by the Employees’ Retirement System of the State of Rhode Island, came after Cook on Jan. 2, 2019 unexpectedly reduced Apple’s quarterly revenue forecast by up to $9 billion, in part because of U.S.-China trade tensions.
On the analyst call back in 2018, Cook had said that the iPhone XS and XS Max had a “really great start,” and that while some emerging markets faced downward sales pressures “I would not put China in that category.”
Apple has not yet issued any comment regarding the matter.