Apple to pay $490 million to settle allegations that it misled investors about iPhone sales in China

FILE - A trade-in for iPhone XR promotion board is displayed as an Apple employee waits for customers at its retail store in Beijing, Thursday, Jan. 3, 2019. Apple has agreed to pay $490 million to settle a class-action lawsuit alleging CEO Tim Cook misled investors about a steep downturn in the iPhone’s sales in China that culminated in a jarring revision to the company’s revenue forecast. The preliminary settlement was filed Friday, March 15, 2024, in Oakland, Calif., federal court.

The preliminary settlement filed Friday in Oakland, California, federal court stems from a shareholder lawsuit focused on the way Apple relayed information about how iPhone modelson Jan. 2, 2019 when the Cook issued a warning that Apple’s revenue for the just-completed quarter would fall $9 billion below management’s forecast for the period. What’s more, virtually all of the sales drop was traced to weak demand in China.

It marked the first time Apple had cut its revenue guidance since the iPhone’s release in 2007 and triggered its stock price to plunge 10% in the next day of frenetic trading, wiping out more than $70 billion in shareholder wealth.2 years on, still no answer to why a China Eastern Boeing 737 crashed, killing all 132 people aboardApple vehemently denied Cook deceived investors about the iPhone’s sales in China between early November and early January.

The settlement was reached through a mediator after U.S. District Judge Yvonne Gonzalez Rogers rejected Apple’s request to dismiss the case and set a Sept. 9 trial date.Thousands of shareholders who bought Apple stock in late 2018 could be eligible for a piece of the settlement, which will be distributed from of a pool that will be less than $490 million after lawyers involved in the case are paid. The attorneys plan to seek up to one-fourth, or about $122 million, of the settlement..

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