CUPERTINO: Apple agreed to pay $490 million to settle a class-action lawsuit that alleged Chief Executive Tim Cook defrauded shareholders by concealing falling demand for iPhones in China.

A preliminary settlement was filed on Friday with the US District Court in Oakland, California, and requires approval by US District Judge Yvonne Gonzalez Rogers.

It stemmed from Apple’s unexpected announcement on Jan 2, 2019 that the iPhone maker would slash its quarterly revenue forecast by up to $9 billion, blaming US-China trade tensions.

Cook had told investors on an Nov 1, 2018, analyst call that although Apple faced sales pressure in markets such as Brazil, India, Russia and Turkey, where currencies had weakened, “I would not put China in that category.” Apple told suppliers a few days later to curb production.

The lowered revenue forecast was Apple’s first since the iPhone’s launch in 2007. Shares of Apple fell 10pc the next day, wiping out $74bn of market value.

Apple and its lawyers did not immediately respond to requests for comment on the ruling.

The Cupertino, Califor­nia-based company denied liability, but settled to avoid the cost and distraction of litigation, court papers show.

Shawn Williams, a partner at Robbins Geller Rudman & Dowd representing the shareholders, called the settlement an “outstanding result” for the class. The settlement covers investors who bought

Apple shares in the two months between Cook’s comments and the revenue forecast.

Published in Dawn, March 17th, 2024