Apple Settles $490M Fraud Suit Over Cook's China Sales Claims

Apple Inc. has reached a $490 million settlement in a class-action lawsuit that accused CEO Tim Cook of misleading investors about iPhone demand in China. The settlement is subject to approval by U.S. District Judge Yvonne Gonzalez Rogers. The lawsuit, filed in the U.S. District Court in Oakland, California, stemmed from a January 2019 announcement by Apple that it would lower its quarterly revenue forecast by as much as $9 billion, largely due to U.S.-China trade tensions. This disclosure resulted in a significant drop in Apple's stock value, with shares falling 10%.

The lead plaintiff in the case is the Norfolk County Council, which oversees the Norfolk Pension Fund in Norwich, England. Despite the settlement, Apple has not admitted to any wrongdoing, stating that the agreement was reached to avoid further legal expenses and distractions. Should the settlement be approved, attorneys for the shareholders may request up to 25% of the settlement amount in fees. The initial controversy arose from a statement by Tim Cook on an analyst call on November 1, 2018, suggesting that China was not a category of concern for Apple, which was subsequently contradicted by the revenue forecast reduction.