“Apple knew in November its iPhone sales were in trouble, but painted a falsely rosy picture for investors that amounted to securities fraud, a new lawsuit claims,” Ethan Baron reports for The San Jose Mercury News. “The lawsuit seeks class-action status, to bring in everyone who bought Apple common stock between November 2, 2018 and January 2, 2019. The plaintiff estimated hundreds of thousands of investors who allegedly suffered economic loss could sign on.”
“The Silicon Valley technology giant and its CEO Tim Cook were aware in November that the U.S. trade war with China was affecting iPhone demand there, the lawsuit by the City of Roseville employees’ retirement fund claims,” Baron reports. “The company and its leader also knew customers were replacing batteries in older iPhones instead of buying new iPhones, cutting sales growth, according to the suit, filed Tuesday in Northern California U.S. District Court.”
“Apple, however, wasn’t telling investors what the company knew, the suit alleged,” Baron reports. “Apple and Cook’s ‘materially false and misleading statements’ in November propped up the company’s stock, ‘which continued to trade at artificially inflated prices,’ the suit alleged, characterizing the statements as ‘fraud or deceit.'”
“The suit claim[s] Apple, Cook and the company’s chief financial officer Luca Maestri violated the U.S. Securities Exchange Act,” Baron reports. “The plaintiff is seeking a jury trial and unspecified damages.”
Read more in the full article here.
MacDailyNews Take: Both Cook and Maestri could have thought, back in November, that China iPhone sales would continue and they might not have been able to foresee, even though it seems obvious in hindsight, that a late rush of battery replacements would ensue in December just before the low-priced iPhone battery replacement program’s end date.
So, this seems like a tough one for the attorneys of the City of Roseville employees’ retirement fund to prove.
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