Did Apple mislead investors by not coming clean sooner about the drop in iPhone sales? That’s what a pair of new class action lawsuits suggest.
The suits were filed by City of Roseville employees’ retirement fund and the Schall Law Firm, a national shareholder rights litigation firm. They allege that Apple made false or misleading statements that failed to properly disclose its iPhone sales stumble. This could, they suggest, amount to securities fraud.
The news items Apple failed to disclose on time included poor sales in China and the impact of the 2018 battery replacement program. Apple later acknowledged that both of these had caused lower than expected iPhone sales. They led to Apple stock tanking for a short time, although it has since staged a recovery.
The lawsuits seek to recover damages for those who purchased stock between November 2, 2018 and January 2, 2019.
As the second of the lawsuits claim:
“Apple slashed production of 2018 iPhone models and cut prices to reduce its current inventory. The Company also withheld unit sales for iPhones and other products, a metric long used by investors to judge the Company’s performance, in order to mask the decline in sales of the iPhone, Apple’s most prominent product. Based on these facts, the Company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about Apple, investors suffered damages.”
No stranger to class action suits
This isn’t the first (or second) time that Apple has been investigated over this issue.
Earlier this year, the firm of Bronstein, Gewirtz & Grossman, LLC accused Apple of failing to disclose this information. That complaint alleged that Tim Cook mislead investors. Back in November, Cook said that, “our business in China was very strong last quarter. We grew 16 percent, which we’re very happy with. iPhone in particular was very strong, very strong double-digit growth there.”
Apple is no stranger to class action lawsuits, ranging from Antennagate to the iPhone throttling controversies. Probably the biggest of these lawsuits was one filed in South Korea, which grew to include 370,000 individuals. That would be equal to one out of every 138 people who live in the country. Apple is still fighting some of these iPhone throttling suits.
Source: BusinessWire and BusinessWire
