What you need to know
- Apple will face a class action lawsuit filed by an English County.
- The case claims Apple CEO Tim Cook and CFO Luca Maestri misled shareholders over iPhone demand in China.
- A judge has certified a class allowing other shareholders to join the action.
A judge has certified the class in a lawsuit filed against Apple claiming CEO Tim Cook and CFO Luca Maestri misled shareholders about the company's performance in China.
From The Telegraph:
An English council suing Apple for concealing weak iPhone demand has won a legal breakthrough after a judge approved its attempt to have the case turned into a class action.A California judge certified Norfolk County Council's case against the tech giant as a class action after a lengthy battle over the merits of the case.Its status potentially strengthens the council's case, and could lead to Apple having to make a larger payout if found liable.
The case was originally filed against Apple in April of 2019 by the City of Roseville Employees' Retirement System, however, the case was later consolidated to include the English county of Norfolk, which now leads the suit.
The original suit notes an Apple earnings call noting that Apple was seeing pressures from various emerging markets but "would not put China in that category", describing Apple's business as "very strong" in the country, concealing how bad the situation in the country actually was and misleading shareholders. In particular, the suit notes the poor performance of the iPhone XS, XS Max, and XR, the company's best iPhones at the time, stating they were too expensive for many Chinese customers and didn't offer significant upgrades over the previous model.
A subsequent profit warning issued by Apple caused its share price to fall 8%, which Norfolk County Council claims cost its pension fund $1 million.
On February 4, judge Yvonne Gonzalez Rogers granted in part a motion to certify a class action lawsuit in the case, meaning other shareholders can join the case and possibly inflating the potential payout should shareholders win a court victory.
