Apple faces another litigation case after a U.S. court Judge accepts the filing by AAPL investors This time, the plaintiff has accused the CEO of the company, Tim Cook of making misleading remarks at an analyst call in 2018, which led to the unfortunate loss of billions of dollars of investors’ money.
Reuter reports that U.S District Judge Yvonne Gonzalaz Rogers allowed the lawsuit by shareholders led by a UK pension fund over Tim Cook’s November 1, 2018 comment on dropping iPhone sales in China. When questioned about emerging markets, Cook said, “I would not put China in that category”. A few months after on Jan 1, 2019, Cook allegedly told suppliers to limit the smartphone products which resulted in a damaging cut of quarterly revenue forecast by $9 billion.
In 2018, iPhone XS, XS Max and XR models. The smartphones housed innovative and new technology in the industry at that time, like the introduction of the notch with FaceID authentication sensors and the removal of physical Home Button, powered by A12 Bionic processor, vertical dual cameras system and more.
U.S Judge Allows Lawsuit Against Apple by Investors
In 23 pages ruling, Judge Rogers said that shareholders’ accusations against Apple’s CEO, Tim Cook were plausible and that his remarks on the analyst call about China were “materially false and misleading. She wrote,
“While Cook might not have known specifics about “troubling signs” in China that the company had begun seeing, it strains credulity he would have been in the dark about the trade tensions and their possible impact on Apple.
The plaintiffs raised a “strong inference” that Cook knew about the risks when discussing China on the analyst call, and a “cogent and compelling inference that Cook did not act innocently or with mere negligence.”
In response to the accusations, Apple and Cook state that there is no proof of intentional defraud. Tim Cook is reported to partially blame the revenue loss experienced in 2019 on the “pressure on China’s economy from U.S.-China trade tensions.”
The lowered revenue forecast was the first by Cupertino, California-based Apple since the iPhone’s launch in 2007. Shares of Apple fell 10% the next day, erasing $74 billion of market value.
Previously, Judge Rogers presided over the injunction lawsuit by Epic Games against Apple over the Fortnite ban on iOS App Store. She ruled in favor of the iPhone maker to ban the gaming app from its digital ecosystem for an update that breached the App Store contract.