Judge: Apple must face U.S. shareholder lawsuit over CEO Cook’s iPhone and China comments

Late Tuesday, a U.S. federal judge said Apple must face part of a shareholder lawsuit claiming CEO Tim Cook’s comments touting strong iPhone demand fraudulently concealed falling demand for iPhones, especially in China, leading to tens of billions of dollars in shareholder losses.

Apple CEO Tim Cook
Apple CEO Tim Cook
Jonathan Stempel for Reuters:

U.S. District Judge Yvonne Gonzalez Rogers ruled late Tuesday that shareholders can sue over Chief Executive Tim Cook’s comments touting strong iPhone demand on a Nov. 1, 2018 analyst call, only a few days before Apple told its largest manufacturers to curb production.

“Absent some natural disaster or other intervening reason, it is simply implausible that Cook would not have known that iPhone demand in China was falling mere days before cutting production lines,” Rogers wrote. The Oakland, California-based judge also said a decision by Apple to stop reporting iPhone unit sales “plausibly suggests that defendants expected unit sales to decline.”

The complaint, led by the Employees’ Retirement System of the State of Rhode Island, came after Cook on Jan. 2, 2019 unexpectedly reduced Apple’s quarterly revenue forecast by up to $9 billion, in part because of U.S.-China trade tensions… Cook had said on the analyst call that the iPhone XS and XS Max had a “really great start,” and that while some emerging markets faced downward sales pressures “I would not put China in that category.”

MacDailyNews Take: This Apple shareholder lawsuit should fail because both Apple CEO Tim Cook and CFO Luca Maestri could have thought, back in November 2018, that China iPhone sales would continue and they might not have been able to foresee, even though it seems painfully obvious in hindsight, that a late rush of battery replacements would ensue in December 2018 just before the low-priced iPhone battery replacement program’s end date, negatively impacting sales of new iPhones.

SEE ALSO:
Class action lawsuit filed against Apple for making false and misleading statements to the market – May 6, 2019
Levi & Korsinsky, LLP announces class action lawsuit against Apple over false and misleading statements – April 19, 2019
The Law Offices of Vincent Wong files class action lawsuit against Apple, alleging executives made false and misleading statements to the market – April 19, 2019
Bronstein, Gewirtz & Grossman announces deadline for class action lawsuit against Apple over false and misleading statements – April 19, 2019

10 Comments

  1. MDN’s take, is as usual, hopelessly biased. As a long time AAPL shareholder, I am in full support of this lawsuit and hope that Tim Cook loses BIG TIME.

      1. Agreed. We’ve held our shares over 20 years and strongly support Tim.

        On Nov 1, 2018 AAPL closed at $222. Today it closed at $325. I don’t get what they are complaining about. If they had simply held their shares they’d have a 46% gain.

    1. You are hopelessly anti-Apple biased, Jackie. Each of your posts drips with, well, something. Are you Mrs applecynic by any chance? You and he would make for perfect bedfellows who can go forth and procreate each other.

    2. The fact that MDN’s take is “hopelessly biased” is not relevant to the question.
      AAPL is selling well – several dollars a share above the previous (C-19) high.
      I saw it dropping a few months back and made an opportunistic buy. 350 shares returned a $22K profit when I sold them about $5 a share back. Would that I’d had the nerve to hold.
      Show the judge the stock-price chart and she will note that the unit sales may have gone down, but the SHARE prices rebounded and recovered. THAT, Jackie, is the question.
      The other question is why you continue to hold AAPL after it far out-distanced your purchase price?

      1. Jackie probably enjoys whinging and moaning, and as an owner she feels “entitled”. Or she’s a psycho who enjoys lying. Had to say. Maybe both.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.