Apple, Investors Reach $490 Million Settlement Over Fraud Case

Lynn Doan, Bloomberg News

CUPERTINO, CALIFORNIA - JUNE 05: Apple CEO Tim Cook speaks before the start of the Apple Worldwide Developers Conference at its headquarters on June 05, 2023 in Cupertino, California. Apple CEO Tim Cook kicked off the annual WWDC23 developer conference. (Photo by Justin Sullivan/Getty Images) Photographer: Justin Sullivan/Getty Images North America , Photographer: Justin Sullivan/Getty Images North America

(Bloomberg) -- Apple Inc. reached a $490 million settlement of a class-action lawsuit brought by a group of investors who accused Chief Executive Officer Tim Cook of misleading them in 2018 about the company’s sales prospects.

Cook made false statements about the company’s business in China that caused Apple stock to trade at artificially inflated prices, the investors said in their complaint, which alleged violation of securities laws. Lawyers disclosed the proposed settlement in a request for judicial approval filed Friday in federal court in Oakland, California.

The settlement comes as Apple continues to face headwinds in China, where iPhone sales fell by a surprising 24% over the first six weeks of this year, according to independent research released earlier this month. Attorneys for the investors described the settlement as the third-largest securities class-action recovery in the district’s history.

Apple denied any violation of law, but said in the filing it agreed to the settlement “in recognition that further litigation will be protracted, overly burdensome, expensive, and distracting.”

Apple shares were down 1.1% on Friday amid a broader pullback in the stock market.

The case is Apple Inc. Securities Litigation, 19-cv-2033, US District Court, Northern District of California (Oakland).

(Adds additional detail from filing in fourth paragraph)