(Reuters) — Apple has reached a $490 million settlement to resolve a class-action lawsuit that alleged CEO Tim Cook defrauded shareholders by concealing falling demand for iPhones in China.
A preliminary settlement was filed Friday with the U.S. District Court in Oakland, California, and requires approval by U.S. District Judge Yvonne Gonzalez Rogers.
It stemmed from Apple’s unexpected announcement on Jan. 2, 2019, that the iPhone maker would slash its quarterly revenue forecast by up to $9 billion, blaming U.S.-China trade tensions.
Mr. Cook had told investors on a Nov. 1, 2018, analyst call that although Apple faced sales pressure in markets such as Brazil, India, Russia and Turkey, where currencies had weakened, “I would not put China in that category.”
Apple told suppliers a few days later to curb production.
The lowered revenue forecast was Apple’s first since the iPhone’s launch in 2007. Shares of Apple fell 10% the next day, wiping out $74 billion of market value.
Apple and its lawyers did not immediately respond to requests for comment on the ruling.
The Cupertino, California-based company denied liability but settled to avoid the cost and distraction of litigation, court papers show.
Shawn Williams, a lawyer for the shareholders, called the settlement an “outstanding result” for the class, which includes shareholders who bought Apple shares in the two months between Cook’s comments and the revenue forecast.
