Apple is paying $490M to settle a class-action lawsuit that accused the company’s CEO, Tim Cook, of defrauding shareholders about the demand for iPhone in China.
The information shared by Reuters says this preliminary settlement was filed today with the US District Court In Oakland, California, and requires approval by US District Judge Yvonne Gonzalez Rogers, who was behind the Epic vs. Apple lawsuit.
This lawsuit concerns an investor call on November 1, 2018, in which Cook said Apple faced pressure in markets such as Brazil, India, Russia, and Turkey due to weakened currencies. Still, he said China had nothing to worry about. “I would not put China in that category.”
A few days later, Apple curbed production of the iPhone. Apple shares fell 10% the next day, wiping out $74 billion of market value.
Apple didn’t comment on the ruling. Still, it denied liability but settled to avoid the cost and distraction of litigation, according to Reuters. This settlement covers “investors who bought Apple shares in the two months between Cook’s comments and the revenue forecast.”
Last year, Judge Rogers refused to dismiss the lawsuit, as she believed Cook wasn’t discussing Apple’s sales outlooks and not currency changes since Apple knew China’s economy was slowing and demand could fall.
Although $490 million is quite a lot of money, Reuters highlights that this payout equals a little under two days of Apple’s profit in the latest fiscal year, which was $97 billion.
Since this lawsuit was filed, the price of Apple’s shares more than quadrupled, giving the company over $2.6 trillion in market value.
Also, recently, Apple was fined $2 billion in Europe for anti-competitive behavior against Spotify. In a press release, the European Commission said it fined Apple for “abusing its dominant position for the distribution of music streaming apps” through the App Store.
BGR will keep following Apple’s legal issues as we learn more about them.
