Judge Orders Apple to Face Class-Action Lawsuit Over Tim Cook’s Comments
U.S. District Judge Yvonne Gonzalez Rogers has ordered Apple to face a proposed class-action lawsuit by shareholders who accused CEO Tim Cook of concealing falling demand for iPhones in China, which resulted in billions of dollars of losses for the investors, Reuters is reporting.
Rogers noted in a decision earlier this week that shareholders led by a UK pension fund can sue over Cook’s comment on a Nov. 1, 2018, analyst call where he said that while Apple was facing sales pressure in some emerging markets, “I would not put China in that category.”
In a 23-page decision, the judge said that shareholders plausibly alleged that Cook’s statements on the analyst call about China were “materially false and misleading.”
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 and Cook have, however, maintained that there was no proof they defrauded or intended to defraud the plaintiffs.