“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.
SEE ALSO:
Apple replaced 11 million iPhone batteries under their $29 replacement program – January 15, 2019
Two things Tim Cook just did that make Apple look guilty today – January 3, 2019
CEO Cook issues memo to employees after Apple slashes revenue outlook for the first time in almost two decades – January 3, 2019
Apple’s earnings warning means CEO Tim Cook now has a major credibility problem – January 3, 2019
Loup Ventures: We continue to expect AAPL to outperform the rest of FAANG in 2019 – January 3, 2019
Open thread: Does Apple need new leadership? – January 2, 2019
CEO Tim Cook on why Apple lowered first-quarter revenue forecasts – January 2, 2019
Apple CEO Tim Cook issues public letter to investors, lowers guidance – January 2, 2019
The most annoying things about Apple’s iPhone ‘batterygate’ apology – December 29, 2017
If only there were a method to jettison the idle rich and rich-wannabes, you know, bloodsuckers who do the very apposite of adding meaningful value to a company.
Man you are one demented loser !
Oh Boy must be a fan of Paris Hilton.
That would be law enforcement. And so it begins…
Ok. When WS is manipulating AAPL, everything goes… When everylittle anal is trying to manipulate AAPL, everything goes…
When TC and Cie is playing the game, they need to pay!
I am a sharholder. I follow AAPL closely. I aint no pro. I knew it wasn’t a good time to invest due to several factor. The simple fact that Xr was priced as high as this ringed an alarm…
If you invest blindly in this crooked world,you are the only one to blame…
Well I am a shareholder too. The case mention period between November 2, 2018 and January 2, 2019. Its basically between 207.48 and 142.19. You say it was not a good time to invest, which I disagree with. In fact I added in several occasions. I would not complain if I had added more during that period (end of year until early 2019). During that time and a bit after I more than doubled my position in AAPL and I have no regrets whatsoever. In fact I am very happy I was able to buy in for several times @156 and @180 and my AAPL position is currently having a nice unrealized profit + dividends.
So you did after TC annouced the numbers wouldn’t be there?
I did at 160 too. But right after their new iPhone linup(november,december), I didn’t beleive the linup was good enough. That was it for 2018, for me.
Lineup was fine imo. “S” is never considered “cool” buy the media. The whole smartphone market was slowing down and still is.
I was long before the launch. Times I added:
2018.12.03 added @182.61
2018.12.28 added @156.6
2018.12.31 added @156.6
2018.01.02 Tim sends a letter shareholders, stock drops to 14x, I was literally laughing because of my last timings which I considered poor at that moment)
2019.01.25 added @156.49
2019.03.12 added @182.48
Overall it was a nice ride.
Too many lawyers.
Seems unlikely to succeed. It’s not like they were out on the TV saying how wonderful things were. As I recall they were quiet, as usual, and when they knew for sure things were not great they came out and made a public announcement. Maybe you could fault them for not saying something a few weeks earlier, but I doubt that rises anywhere near the level of misbehavior charged here.
Cook et al obviously knew that their quarter report would be bad. It has far less to do with the China issue, but they have to attribute the sales drop to something they could claim to be out of their reasonable control. They already knew the decline of iPhone sales so much earlier even around the end of 2017. To hide this, Cook et al devised a childish idea to overprice the product way over the head of average consumers to maintain the ASP. They also tried to hide the sales drop by not disclosing the unit sales. And as usual, Tim Cook kept blowing his horn with outrageous hyping words. Around this time, I already posted about the possible SEC scrutiny. As painful it is to Apple, they may deserve the punishment such as the class actions (and a possible SEC investigation) which may end Cook’s greedy and arrogant posture once and for all. Apple would then be able to return to regular programming, which is good for all of us..
After this first lawsuit was filed, three more filed on Good Friday bringing the total to four that I know of.
Circled back here to comment on your post because no other post moving forward is more comprehensive explaining the “heart of the matter” (apologies to Don Henley).
“As painful it is to Apple…”
More painful is legions of Mac Pros loyal since the beginning of Apple thrown under the bus during the Cook administration. Righteously could turn out as overdue comeuppance.
“they may deserve the punishment such as the class actions (and a possible SEC investigation)…”
No “may,” they deserve it. Period.
“which may end Cook’s greedy and arrogant posture once and for all.”
Now that, is the most superlative comment and Número Uno desired outcome.
“Apple would then be able to return to regular programming, which is good for all of us..”
Worth repeating: the Número Uno desired outcome after Cook exits Apple for good…
I know who is behind this..its the one and only and our own infamous Von Greenspan whiner.
🤣😂
🇺🇸No it’s not, it’s the greatest POTUS ever working behind the scenes and showing how much power is at his disposal. MAGA 2020🇺🇸
greatest potus ever? better than Washington? Better than Teddy Roosevelt? Better than Eisenhower?
you are delusional. lying Trump is Nixon 2.0
Really enjoyed this article, is there any way I can receive an alert email whenever you write a new article?