Just after coming to a surprise settlement with Qualcomm yesterday, Apple has been hit with another lawsuit. The latest is a class-action suit filed by an employees’ retirement fund and claims that Apple committed securities fraud with how it handled information about its iPhone sales.
As reported by The Mercury News, the City of Roseville employees’ retirement fund filed the lawsuit against Apple saying that the company knew back in November last year that iPhone sales weren’t going as expected, but were telling a different story to investors.
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.
Ahead of its last earnings report on January 29, Apple gave warning about its revenue guidance miss four weeks earlier on January 2. However, this lawsuit claims that Apple knew in the fall of 2018 that iPhone demand in China was down. It also alleges that Apple knew that fewer customers were buying new iPhones, and instead taking advantage of the battery replacement program that ran through last year.
Further, the suit alleges that Cook made “materially false and misleading statements” during its November 2018 earnings call that covered its Q4 2018 results.
In a conference call with investors and analysts the same day, Apple was asked whether trade U.S. and China tariffs and tariff threats were affecting iPhone demand in China, and Cook said the firm was facing currencies-related pressure from markets like Turkey, India, Brazil, and Russia but that he “would not put China in that category,” according to the suit.
Apple’s decision to stop reporting unit sales is also cited in the lawsuit as a way for Apple to “mask declines in unit sales of the company’s flagship product.”
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