Last Updated on March 18, 2024 by ethinos
Summary Points:
- Apple Inc agrees to a $490 million settlement over a lawsuit.
- Allegations claim CEO Tim Cook withheld information on declining iPhone sales in China.
- Preliminary settlement filed with the US District Court in Oakland, California.
- Settlement awaits approval from US District Judge Yvonne Gonzalez Rogers.
- The lawsuit follows Apple’s revenue forecast cut by up to $9 billion due to US-China trade tensions.
Apple Inc has reached a preliminary agreement to settle a lawsuit for $490 million, a case that accused CEO Tim Cook of misleading shareholders by not disclosing the declining demand for iPhones in China. This settlement, which is pending approval by US District Judge Yvonne Gonzalez Rogers, represents a significant moment for corporate transparency and investor relations.
The lawsuit stemmed from a period of heightened tension between the US and China, during which Apple announced an unexpected reduction in its quarterly revenue forecast by as much as $9 billion. This announcement sent shockwaves through the market, as it was the first such forecast cut since the iPhone’s debut in 2007. The lawsuit alleged that Tim Cook had previously assured investors that China’s sales were not affected by the same pressures seen in other markets, despite later actions that suggested a different reality.
Investors were caught off guard when Apple’s shares plummeted by 10% the following day, erasing $74 billion in market value. The lawsuit claimed that Cook’s reassurances were misleading, leading to significant losses for shareholders when the truth about iPhone sales came to light.
The settlement amount of $490 million, while substantial, represents just under two days of profit for the tech giant, which reported $97 billion in net income in its latest fiscal year. Apple has denied any wrongdoing but opted to settle to avoid the further costs and distractions of litigation.
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