Lawsuit filed by Apple shareholders alleges Tim Cook and associates fraudulently covered up declining demand for iPhone, especially in China
Disgruntled Apple shareholders have taken legal action against the company, making serious allegations about the financial disclosures.
According to Reuters, a federal judge said Apple faces part of a lawsuit claiming it fraudulently covered up declining demand for the iPhone, especially in China, resulting in tens of billions of dollars in losses for shareholders.
This is not the first time that Apple has been sued by shareholders. In 2013, for example, CEO Tim Cook dismissed a lawsuit by hedge fund manager David Einhorn that sought to improve shareholder returns as a “silly show.” Einhorn then withdrew his lawsuit.
But now, according to Reuters, U.S. District Judge Yvonne Gonzalez Rogers, while dismissing most of the claims in the retrial, ruled on Tuesday night that shareholders can sue Tim Cook’s comments touting strong iPhone demand. during an analyst call on November 1, 2018, just a few days. before Apple asks its biggest manufacturers to cut production.
It was the first time since the iPhone’s launch in 2007 that the Cupertino, Calif.-Based company had cut its revenue forecast.
Apple stock fell 10% the next day, wiping out $ 74 billion in market value, hence the ire of shareholders.
“In the absence of a natural disaster or some other intermediate reason, it is simply implausible that Cook did not know that iPhone demand in China was declining just days before cutting production lines.” , Rogers would have written.
The judge also said that a decision by Apple to stop reporting iPhone unit sales “plausibly suggests that the defendants expected unit sales to decline,” Reuters reported.
Apple did not immediately respond to requests for comment on Wednesday.
The shareholder lawsuit was conducted by the Rhode Island State Employee Retirement System.
Earlier this week, it was revealed that the smartphone industry had seen its worst sales decline in the first quarter of 2020, as end-user sales fell 20.2% year-on-year due to the coronavirus lockdown.
Last month, a report said Apple was planning to delay full production of its line of iPhones slated for release later this year by about a month.
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