Why Roseville, MI, sued Apple for securities fraud
The city’s employee retirement fund put money into Apple shortly before Tim Cook’s Jan. 2 guidance warning. Ouch.
Apple Inc was accused in a new lawsuit of securities fraud for concealing a slump in demand for iPhones, particularly in China, leading to a $74 billion (£57 billion) one-day slide in its market value once the truth became known…
The complaint said iPhone demand was falling because of U.S.-China trade tensions and customers’ growing preference to replace batteries in older iPhones, prompting Apple to slash orders from suppliers for new iPhones and cut prices to reduce inventory.
But none of this was disclosed when it should have been, the complaint said, in part because of Apple’s Nov. 1, 2018 decision to stop disclosing unit sales for iPhones.
Asked during a conference call that day about Apple’s performance in emerging markets, Cook cited downward pressures on sales in Brazil and India, but said “I would not put China in that category,” the complaint said.
The case is City of Roseville Employees’ Retirement System v Apple Inc et al, U.S. District Court, Northern District of California, No. 19-02033.
My take: I tend give suits like this wide berth. But in this case, I think Roseville may have a point.