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Apple agrees to pay nearly half a billion dollars to investors over China sales

Tech giant Apple has agreed to pay almost half a billion dollars to investors on Friday, ending a nearly five year legal battle over allegations it exaggerated iPhone demands in China in 2018.

The $490 million settlement, which has been filed with the U.S. District Court in Oakland, California, will go to investors who bought shares between November 2018 and January 2019.

“We are proud of this recovery for investors,” a spokesperson for Norfolk Pension Fund, a U.K.-based group that led the lawsuit, told the Telegraph. “We are mindful that we are stewards of pensions relied upon by thousands of families and individuals. When and where it’s warranted, we will take decisive action to recover losses when our participants’ investments are harmed by fraud.”

Investors claimed the tech giant, including CEO Tim Cook, had failed to warn them about a downturn in sales in China during a business call in 2018, China being one of its largest markets.

The sudden drop in sales led the company to issue a statement on Jan. 2, 2019, that because of a strain on U.S.-China trade relations, the company would slash its quarterly revenue forecast by up to $9 billion. It marked the first time Apple had to lower its forecast since it launched the iPhone in 2007.

In the settlement, Apple refused to admit liability for the drop in revenue but agreed to settle to avoid going to court, according to court documents.

“Defendants have expressly denied and continue to deny that they have violated the federal securities laws or any other laws, or have otherwise misled investors as alleged in this action,” the filing said, according to Reuters. “But in recognition that further litigation will be protracted, overly burdensome, expensive, and distracting, [the defendants] determined that it is desirable and beneficial for them to resolve the action.”

The settlement will be distributed from a pool that will be less than $490 million agreed after lawyers involved in the case are paid. Attorneys could seek up to one-fourth, or about $122 million, of the settlement.

-Washington Examiner

 

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