Apple will have to pay $490 million because of Tim Cook's mistake

Apple has agreed to pay $490 million to settle a class action lawsuit related to CEO Tim Cook.

Details

The lawsuit alleges that Tim Cook defrauded shareholders by hiding a drop in iPhone demand in China. It happened in 2018: on 1 November, Cook said during a meeting with analysts that Apple was facing pressure in emerging markets. But China wasn't on that list.

""In relation to China specifically, I would not put China in that category. Our business in China was very strong last quarter. We grew 16%, which we’re very happy with. iPhone in particular was very strong, very strong double-digit growth there. Our other products category was also stronger, in fact, a bit stronger than even the overall company number"," Tim Cook said at the time.

And in January 2019, Cook sent a letter to investors announcing lower revenue for the fourth quarter of 2018. While revenue was originally projected to be between $89 billion and $93 billion for the quarter, it ended up being $84.3 billion. Apple's share price fell by about 25% between 1 November 2018 and 31 January 2019.

In that letter, Tim Cook said that China's slowing economy was to blame for the revenue decline, among other things.

According to investors, Cook knew that iPhone demand in China was falling during the November 2018 earnings report but failed to report it.
Apple denies the allegations and has not admitted guilt. But the company has agreed to pay $490 million to avoid additional costs and time associated with litigation.

Source: Reuters