Apple Settles $490m Lawsuit Over CEO’s China Remarks

Following allegations of shareholder fraud against Apple Chief Executive Tim Cook for concealing declining iPhone demand in China, the tech giant has agreed to settle a class-action lawsuit by paying $490 million. The preliminary settlement was filed with the US District Court in Oakland, California, on Friday, pending approval by US District Judge Yvonne Gonzalez Rogers.

The lawsuit originated from Apple’s announcement on January 2, 2019, revealing a significant slash in its quarterly revenue forecast by up to $9 billion. This adjustment was attributed to the ongoing trade tensions between the US and China.

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During an analyst call on November 1, 2018, Cook assured investors that despite sales pressure in various markets due to currency devaluation, China was not among them. However, shortly after, Apple instructed its suppliers to scale back production.

This marked Apple’s first downward revision of revenue forecast since the launch of the iPhone in 2007, resulting in a 10% drop in the company’s shares the following day, erasing $74 billion in market value.

Apple and its legal representatives have yet to comment on the settlement ruling in response to requests for clarification.

The settlement agreement underscores the ramifications of corporate transparency and accountability, as well as the significant financial impact such disclosures can have on shareholders and market value.