Apple reportedly settled a class-action lawsuit that accused the company of hiding news of declining iPhone demand in China. It concerns comments made by CEO Tim Cook during an investor call back in 2018.
The iPhone-maker allegedly will pay out a $490 million settlement, according to a preliminary settlement filed Friday with the U.S. District Court in Oakland, California.
Apple pays up after misleading comments about iPhone demand in China
When a CEO stretches the truth about the company they run, they face consequences. In a prominent example, tweets Elon Musk made in 2018 about taking EV-maker Tesla private resulted in a $40 million fine and a requirement that he resign as Tesla chairman. Now it’s Tim Cook’s turn.
When speaking to investors in November 2018, Cook said that iPhone demand was declining in some countries but that China was not one of them. Two months later, Cook penned an open letter to investors warning that Apple revenue wouldn’t meet expectations because of declining iPhone demand in China. A class-action lawsuit accused the CEO of deliberately deceiving investors.
Apple and the plaintiffs reached a preliminary settlement, according to Reuters. Apple agreed to pay $490 million but admit no wrongdoing. The money would go to investors who bought AAPL shares after Cook’s November 2018 comment but before the January 2019 open letter.
The settlement has not yet been approved, however. That’s up to U.S. District Judge Yvonne Gonzalez Rogers.
