Apple must face shareholder lawsuit over CEO Tim Cook’s iPhone China sales comments
- Apple and Cook have said there was no proof they defrauded or intended to defraud the plaintiffs
- Apple told suppliers to curb production a few days after Cook spoke, and on January 2, 2019, unexpectedly cut its quarterly revenue forecast
Apple 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, US District Judge Yvonne Gonzalez Rogers said shareholders led by a UK pension fund can sue over Cook’s comment on a November 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 January 2, 2019, unexpectedly cut its quarterly revenue forecast by up to US$9 billion, which Cook blamed in part on pressure on China’s economy from US-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 per cent the next day, erasing US$74 billion of market value.
Apple and Cook have said there was no proof they defrauded or intended to defraud the plaintiffs. The company did not immediately respond on Thursday to requests for comment.