Apple’s (AAPL.O) class-action lawsuit accusing CEO Tim Cook of defrauding shareholders by hiding weakening iPhone demand in China was denied by a U.S. judge.
Late Monday night, U.S. District Judge Yvonne Gonzalez Rogers allowed shareholders led by a British pension fund to sue over Apple’s $74 billion one-day plummet.
On Nov. 1, 2018, analyst call, Cook said, “I would not put China in that category.”
On Jan. 2, 2019, Apple unexpectedly cut its quarterly sales projection by much to $9 billion, blaming U.S.-China trade concerns.
Apple’s shares plunged 10% the day after its first revenue projection cut since the iPhone’s 2007 introduction.
Judge Rogers of Oakland, California, ruled jurors may properly infer that Cook addressed Apple’s China sales prospects, not historical performance or currency changes.
The court said that Apple knew China’s economy was deteriorating and had statistics suggesting demand would fall before Cook’s comment.
“A reasonable jury could find that failure to disclose these risks caused plaintiff’s harm,” Rogers ruled.
Apple and its lawyers declined to comment on Tuesday.
Shareholder lawyer Shawn Williams remarked, “We are pleased with the ruling and look forward to presenting the facts to a jury.”
Norwich-based Norfolk County Council is the principal plaintiff.
Since January 2019, Apple’s market capitalization has nearly tripled to $3 trillion.
Apple Inc. Securities Litigation, U.S. District Court, Northern District of California, No. 19-02033.
