A California federal judge, U.S. District Judge Yvonne Gonzalez Rogers, ruled on Wednesday that investors’ allegations that Apple misrepresented its sales prospects in China in violation of the Securities Exchange Act may proceed, but trimmed other fraud allegations from the putative class action, according to Law360 (a subscription is required to read the entire article).
The judge says shareholders can sue over CEO Tim 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 the CEO blamed in part on pressure on China’s economy from U.S.-China trade tensions.
Apple and Cook have said there’as no proof they defrauded or intended to defraud the plaintiffs. In a 23-page decision, Rogers said shareholders plausibly alleged that Cook’s statements on the analyst call about China were materially false and misleading.