A judge has ruled that Apple must face a class-action lawsuit from shareholders over comments that CEO Tim Cook made in 2018 that possibly lead to billions in loss profit, as Reuters reports:
In a decision on Wednesday, U.S. District Judge Yvonne Gonzalez Rogers said shareholders led by a UK pension fund can sue over Cook’s comment on a Nov. 1, 2018, analyst call that while Apple was facing sales pressure in some emerging markets, “I would not put China in that category.”
Apple told suppliers to curb production a few days after Cook spoke, and on Jan. 2, 2019, unexpectedly cut its quarterly revenue forecast by up to $9 billion, which Cook blamed in part on pressure on China’s economy from U.S.-China trade tensions.
The lowered revenue forecast was the first by Cupertino, California-based Apple since the iPhone’s launch in 2007. Shares of Apple fell 10% the next day, erasing $74 billion of market value.
The judge says that while Mr. Cook may have not known specifics over the comments he made during the conference call, plaintiffs argue that there is is strong evidence that Mr. Cook knew about the risk. Apple did not respond to comment from Reuters.