Apple agreed to pay $490 million to settle a shareholder class action lawsuit filed against the company in 2019. According to the plaintiffs, the tech giant’s CEO Tim Cook provided false information about sales in China when reporting 2018 data. The company denies any wrongdoing, but has chosen to make payments as part of the settlement “to avoid further litigation.”
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Analysts have calculated that the amount of the corporation’s payment is not very significant: based on information about 97 billion dollars of net profit for 2023 (data from Reuters), this is equivalent to approximately two days of Apple’s profit, writes Business Insider.
In 2018, according to the document, Cook reassured shareholders that China should not be identified as one of the markets in which the company was struggling. He announced 16% growth, but within days Apple ordered its suppliers to reduce production.
In early 2019, Apple announced that it was drastically cutting its revenue forecast for the first quarter of the year. Additionally, the company partly blamed the Chinese market for the drop from $89 billion to $93 billion to $84 billion (7.6%).
In court papers, the investors alleged that Cook’s false and misleading comments “caused Apple’s stock to trade at artificially inflated prices and that when the true facts were revealed, Apple’s stock price fell.”
In the statement of claim, Apple denies any wrongdoing. The company says it agreed to the settlement “recognizing that additional litigation would be lengthy, unduly burdensome, costly and distracting.”
The deal still awaits approval from a U.S. district judge.
Author:
Ekaterina Alipova
Source: RB
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
