Norfolk County Council is to tackle Apple in a class action lawsuit over what it alleges was the company’s misleading predictions about iPhone demand in China.
Apple, its chief executive Tim Cook, and its chief financial officer Luca Maestri, are accused of misleading shareholders about iPhone demand in China in 2018.
Mr Cook had told investors that while Apple was seeing pressure in some emerging markets he did not believe demand would be down in China.
However, just two months later the company issued a profit warning blaming weak demand in China, something which caused an 8% drop in its share price.
Norfolk County Council claims that Mr 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.
Apple’s share price dipped to near $37 (£27) in January 2019. As of 11 February the company’s shares are trading at over $168 (£124).
What does it mean?
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.
As a class-action lawsuit other Apple shareholders are able to join the case, which will have a lower threshold for those claimants to prove that their investments in Apple were changed by the allegedly misleading information.
Apple denies wrongdoing and has argued that Mr Cook’s comments were protected statements of opinion and not regulated financial guidance.