Apple Resolves Lawsuit with $490 Million Settlement Over iPhone Sales Disclosure

Apple has opted to settle a lawsuit, agreeing to a substantial $490 million (£385 million) payout, led by Norfolk County Council. The lawsuit accused the tech giant’s CEO, Tim Cook, of deceiving shareholders by concealing diminished demand for iPhones in China. Norfolk Council asserted that a pension fund under its administration incurred losses due to the actions of Mr. Cook.

Expressing satisfaction with the outcome, the Norfolk Pension Fund released a statement, expressing pride in securing compensation for investors. The statement underscored the fund’s responsibility as stewards of pensions relied upon by numerous families and individuals. It emphasised the commitment to taking decisive action to recover losses incurred by fraud whenever necessary.

The class-action lawsuit, representing a group of claimants, focused on statements made by Apple’s CEO, Tim Cook. On November 1, 2018, Cook informed investors of “sales pressure” in certain countries but explicitly excluded China from that category. However, just two months later, on January 2, 2019, Apple revised its quarterly revenue forecast downward, attributing it to escalating tensions between China and the US. This announcement led to a significant decline in Apple’s share price.

During the intervening two months, reports surfaced indicating that Apple had instructed its primary smartphone assemblers to suspend plans for additional production lines for the newly launched iPhone XR. Claimants in the case were investors who had purchased shares between November 2018 and January 2019. They argued that they suffered financial losses because they had been misled by Mr. Cook’s assertions in November.

Originally, the lawsuit was filed against Apple and Mr. Cook by the US city of Roseville. Norfolk Council, which oversees the £4.9 billion Norfolk Pension Fund, assumed the role of lead plaintiff in 2020. Apple contested the litigation, and a trial had been scheduled for later this year. However, this preliminary settlement, filed on Friday with the U.S. District Court in Oakland, California, is likely to avert the need for a trial, pending judicial approval.

The precise portion of the settlement earmarked for Norfolk County Council remains undisclosed. Considering Apple’s staggering $97 billion in net income in the last fiscal year, the payout represents less than two days’ worth of profit for one of the world’s wealthiest companies.

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