Norfolk complaint against Apple over alleged misleading iPhone demand in China, upgraded in San Francisco to a class action lawsuit
Senior management at tech giant Apple, are facing a class action lawsuit, led by a British county council on the east coast of England.
In its complaint, Norfolk County Council alleged that CEO Tim Cook and chief financial officer (CFO) Luca Maestri, mislead shareholders about iPhone demand in China in 2018.
And the bad news for Apple, is that US Judge Yvonne Gonzalez-Rogers in California has granted class-action status to the lawsuit. This means Apple could face larger damages if it loses.
The court case revolves around comments made by CEO Tim Cook in 2018 over demand for the Apple iPhone in China, which the Norfolk Pension Fund alleges misled shareholders.
Cook is alleged to have told shareholders that he did not believe demand for Apple’s smartphone would drop in China. Then, two months later, the tech giant issued a profit warning that blamed weak demand in China and caused its stock to drop 8 percent.
This caused Norfolk Pension Fund, which is run by Norfolk County Council, to allege that Cook must have known at the time that sales in China were starting to slow down.
The council claims that this cost its pension fund almost $1m.
According to Sky News, the council’s petition to turn its suit into a class action has now been certified by Judge Yvonne Gonzalez-Rogers in California, who ruled against Apple’s attempt to dismiss the case.
Apple for its part wrongdoing and argued that Tim Cook’s comments were protected statements of opinion and not regulated financial guidance.
Tim Cook last month saw his 2021 pay rise to nearly $100m (£74m), as Apple fortunes surged during the pandemic thanks to strong demand for its products.
The company’s revenue rose more than 30 percent to $365.82bn for its fiscal 2021.
Apple last month briefly breached the $3 trillion market value threshold, before it share price declined.
The firm is currently valued at $2.79 trillion.