Apple has agreed to pay a hefty sum of $490 million to settle a class-action lawsuit, as revealed in a proposed settlement request filed in federal court in Oakland County, California. The lawsuit accused CEO Tim Cook of intentionally withholding crucial information about sales, which allegedly led to investors suffering losses amounting to billions of dollars.
The group of investors claimed that Cook’s statements misled them, causing Apple’s stock to trade at artificially inflated prices, thus violating securities laws. Despite denying any wrongdoing, Apple acknowledged in the filing that it opted to settle to avoid prolonged, costly, and distracting litigation.
The controversy stems from a late 2018 earnings call, during which Cook remarked that while iPhone sales were declining in some countries, China wasn’t among them. However, shortly after this statement, Apple purportedly instructed suppliers to scale back production, eventually revising its revenue forecast downwards for the first quarter of 2019.
Apple attributed the revenue adjustment to unforeseen economic challenges, particularly in China, stating that it had not anticipated the severity of the economic slowdown. The lead plaintiff in the lawsuit is Britain’s Norfolk County Council, which accused Apple of making false and misleading statements regarding its performance in China, alleging violations of securities laws.
